Your customer says you owe them money.

Two competing claims need separate evidence

An equipment-hire customer refuses to pay, saying a machine breakdown caused lost production worth more than the hire charge. The hire business believes the machine was misused. Both sides now say the other owes money. The practical task is to identify the two claims separately and understand whether any right to deduct one from the other actually applies.

Ask for the counterclaim details

Request the event, date, contractual basis and calculation of the amount claimed against you. Ask for supporting records rather than accepting a rounded figure. Keep the customer's allegation separate from facts that have already been agreed.

Do not dismiss the claim simply because it appeared after a reminder. Equally, do not assume that making an allegation establishes a right to withhold payment. The evidence and applicable agreement need to be assessed.

Build two clear account files

Prepare your invoice claim with the order, terms, supply records and payments. Prepare the response to the customer's claim using maintenance records, communications, photographs or other relevant material. Preserve original records, including anything that may be unhelpful.

A side-by-side summary helps an adviser identify what is genuinely connected and what is unrelated. Avoid combining the figures into one net amount until the basis for doing so is understood. Otherwise the calculation can conceal the real disagreement.

Check any deduction or set-off right

Ask whether the contract or applicable law permits the claimed deduction and what conditions apply. Do not use the word 'set-off' as though it automatically resolves the issue. Its availability and scope can depend on the particular claims and process.

Business.gov.au recommends using clear communication and dispute-resolution options. A focused exchange about the two claims may expose a workable compromise, but a settlement should specify which liabilities are being resolved rather than simply say the account is closed.

Source: Prevent, manage and resolve disputes — business.gov.au

Protect the response timetable

If a formal demand or court claim arrives, identify the response requirements immediately. Continuing discussions may not suspend those requirements. Give the adviser both sides of the dispute, not only the invoice you want paid.

Decide whether a technical assessment or insurer notification is needed for the allegation. Then set a decision point for negotiation or formal action. The goal is to avoid either paying an unsupported counterclaim or ignoring one that needs a proper response.

Define both claims before discussing a balance

Request the counterclaim's basis, evidence and calculation.

Keep your invoice claim and the alleged loss separately documented.

Have deduction rights and any response deadline checked before agreeing a net settlement.

Call CRP today about coordinating support for a debt dispute with competing claims.