Disputes and Credit Recovery System

A beginner-safe operating system to dispute incorrect invoices quickly and recover credits that actually hit your books (not just promised in emails).

Run the OperationPlaybook45 min

Primary outcomes:

•Cost reduction: recover overbilling, enforce pricing, and stop leakage
•Risk mitigation: clean audit trail, reduced vendor gaming, fewer recurring billing errors

Beginner truth: The money isn't "saved" when the vendor agrees. It's saved when the credit is issued and applied.

What this system is

A complete dispute-to-credit workflow with:

• triage and severity rules
• templates for dispute communication
• partial pay rules (pay undisputed, dispute the rest)
• a dispute tracker with aging
• credit issuance and application verification
• root-cause tagging to stop repeat issues

Dispute categories (use consistent tags)

Use these tags so you can report patterns and fix root causes:

•duplicate invoice / duplicate charge

•price mismatch (rate card vs billed)

•quantity mismatch (hours/units overstated)

•period mismatch (wrong dates)

•unauthorized change order / out-of-scope

•pass-through unsupported (missing receipts)

•markup non-compliant

•tax/fee error

•service not delivered / missing proof

•wrong site/cost center coding

The workflow (end-to-end)

Step 1 — Detect and triage (same day)

Every dispute should be classified as:

Low: <$500 or one-time small error
Medium: $500–$5k or recurring pattern
High: >$5k, recurring pattern, or suspected fraud/misconduct

Step 2 — Hold rules (same day)

• If invoice has a dispute: approve undisputed amount only
• Document the disputed amount and reason
• Do not "wait for next month" — vendors learn your habits

Step 3 — Dispute notice to vendor (within 1–3 days)

Send a clear message:

• what's wrong
• what evidence is missing
• what you need to resolve
• deadline

Step 4 — Resolution path (within 7–21 days)

Resolution outcomes:

• corrected invoice
• credit memo issued
• invoice reduced
• dispute rejected with evidence (you accept or escalate)

Step 5 — Confirm credit application (critical)

A credit is only real if:

• it appears on a later invoice OR
• it is refunded OR
• it is posted properly in AP

Step 6 — Root cause fix (prevent repeats)

If it happened twice, it's systemic:

• update contract clause extraction
• update invoice standards
• update AP match rules
• schedule a vendor corrective action review

Templates

Dispute Intake (Internal)

Log disputes internally with all required details

Dispute Intake (Internal)

Vendor:
Invoice #:
Invoice date:
Amount total:
Amount disputed:
Category tag:
Site:
Contract/PO reference:

Issue summary (plain English):
Evidence link(s):
Requested fix:
Deadline:
Owner:

Dispute Email to Vendor

Send clear dispute notice to vendors

Subject: Invoice dispute — [Vendor] — Invoice [#] — Action required

Hi [Name],
We are disputing Invoice [#] dated [date] for the following reason(s):

- Disputed amount: [$]
- Issue type: [tag]
- Issue detail: [plain English explanation]
- Evidence/contract reference: [link or section reference]

To resolve, please provide one of the following by [DATE]:
1) corrected invoice, or
2) credit memo for [$], or
3) supporting documentation that substantiates the charge.

We will process payment for the undisputed amount only while this dispute is open.

Thanks,
[Name]
[Title]

Credit Memo Request

Request credit memo from vendor

Subject: Request for credit memo — Invoice [#]

Hi [Name],
Please issue a credit memo for [$] related to Invoice [#] for [reason].
Please reference:
- Site:
- Contract/PO:
- Billing period:

Once issued, please confirm when and how the credit will be applied.

Thanks,
[Name]

Dispute Tracker (with aging)

Track all disputes with status and next actions

Dispute ID	Vendor	Invoice #	Disputed $	Tag	Open date	Due date	Status	Next action	Owner	Evidence link
(add rows as needed)

Credits Application Log

Make credits real — track through application

Vendor	Credit memo #	Credit $	Issued date	Applied date	Applied to invoice #	Verified by	Evidence link	Notes
(add rows as needed)

Recurring Issue Log

Root-cause prevention for repeat issues

Vendor	Tag	Count (last 90 days)	Root cause hypothesis	Corrective action	Owner	Due date	Status
(add rows as needed)

Cadence (recommended)

Weekly (15 minutes)

Review disputes by age and push actions

Monthly (30 minutes)

Review recurring issues and enforce corrective actions

KPIs

•$ disputed vs $ recovered
•average days to resolve disputes
•# credits issued vs # credits applied (gap indicates leakage)
•recurring dispute rate (should trend down)

Definition of Done

disputes are tracked with owners and due dates
credits are verified as applied (not just promised)
recurring issues trigger contract/invoice rule changes
recovered dollars are visible and repeat issues decrease

Change log

v1.0 (2026-01): Latest release