Partly Disputed Invoice: Record the Amounts and Evidence

Get the disagreement down to a specific line

"The invoice is wrong" doesn't tell you whether the customer disputes the hours, rate, quantity, quality or authority for extra work. Ask which lines and amounts they challenge and what they expected instead. Keep their explanation in their own words in the record; put your response in a separate column.

Gather the accepted quote, order, variation approval, timesheet, delivery record and relevant messages. Check the documents you already hold before asking the customer to send them again. ASBFEO's dispute guidance starts with understanding what was agreed and identifying the actual issue before choosing the next step.

A disputed line also needs an owner and response date. Record who will investigate it and when they'll respond.

Build the split without issuing a second sale

The following fictional example follows invoice INV-362. All figures are total amounts in Australian dollars; it isn't a tax calculation. The customer agrees with $5,400 of work and materials but questions $600 of extra work. They then pay $3,000 and confirm that it goes against the agreed portion.

Assumptions: One original $6,000 invoice. No earlier credits, interest or fees. The customer confirms the receipt allocation. Later, both parties agree to reduce the disputed extra work by $200.

Record	Amount	Classification or evidence	Balance effect
Original: service	$3,600	Customer agrees; accepted quote Q-62	Part of original sale
Original: materials	$1,800	Customer agrees; delivery D-77	Part of original sale
Original: extra work	$600	Disputed: approval of extra hours queried	Part of original sale
Original invoice total	$6,000	$5,400 agreed + $600 disputed	Opening balance $6,000
Receipt R-188	$3,000	Bank receipt; allocated to agreed work	Balance $3,000: $2,400 agreed + $600 disputed
Later agreed reduction	$200	Agreement E-24; adjustment document linked	Balance $2,800: $2,400 + resolved extra work $400

Original ASBG fictional example. Use the assumptions above when replacing these figures with your own.

After the receipt, the ledger still shows $3,000 outstanding. The dispute register explains its composition: $2,400 agreed and $600 disputed. Neither number should quietly disappear to make an ageing report look tidier.

The later agreement resolves the extra-work line at $400. Once the agreed $200 reduction has been properly recorded, the balance becomes $2,800. Retain the $6,000 original invoice, receipt and adjustment reference so someone else can reproduce that result.

Ask about the part the customer agrees with

Confirm that your summary reflects what the customer actually said before using the label 'agreed'. This record helps both sides identify the issue; it doesn't determine who is legally entitled to payment. The ACCC/ASIC debt collection guideline is a starting point for reviewing collection procedures with an adviser.

Use a factual enquiry while investigating the other lines:

Hello [name], thank you for explaining the query on [invoice reference]. My understanding is that you agree with [lines and amount] and query [line and amount] because [specific reason]. Please correct that summary if needed.

I've attached [evidence] and will respond on the queried item by [date]. Could you confirm the payment position for the portion you agree with, and which items any payment will cover? We have recorded [receipts already received] against [confirmed allocation].

This is an administrative message to adapt, not a settlement agreement. If a remittance says "full and final settlement", obtain legal advice before deciding how to respond or treating the payment as an ordinary instalment.

Keep a correspondence log that answers the next question

Use these columns: date, sender, invoice line, issue raised, evidence supplied, response promised, response received and next action. Link to the actual message rather than copying a long email chain into every row.

For the example, the first entry could read: "12 September: customer queries approval of $600 extra work; owner to locate variation email by 15 September." The next entry records what the email shows, not simply "followed up". If there was no approval, say so; don't create a retrospective record and describe it as original evidence.

Update collection settings so automatic reminders don't contradict the dispute record or ask again for money already received. The bookkeeping routine helps reconcile receipts before any message goes out.

Record the adjustment after it is agreed

Keep the decision date, amount, reason, authority and relevant document reference. Ask your registered BAS or tax agent which adjustment documentation and tax treatment apply before posting a reduction. Our tax-invoice guide covers the original document; this register explains the later events.

Take an unresolved dispute, a proposed settlement or a question about withholding payment to a commercial disputes solicitor. Include the actual contract, customer explanation and receipt history. The ACCC's contract guidance provides background; this register makes no finding about either party's rights.

Keep this evidence pack with the account when using the unpaid-invoice guide. The cash flow and getting paid hub connects the surrounding billing tasks.

Next, reconcile the difference when your customer reports another balance.

Key takeaways

• Identify the precise disputed lines and preserve both parties' explanations.
• Allocate receipts using evidence and confirmation, not a convenient guess.
• Record agreed reductions separately from the original invoice.
• Get the legal position and any tax adjustment checked before relying on the final balance.

Where to get help

ASBFEO's dispute-support tool can direct you to assistance. Give a commercial disputes solicitor the contract, original invoice, dispute log and payment correspondence. A registered BAS or tax agent can check adjustment documents and tax consequences. The ACCC/ASIC guideline sets out the collection context; it doesn't decide your individual claim.