Payment issues

If another business owes you money or you are in dispute over a business to business arrangement, it is important to take prompt action to recover the debt or resolve any issues that are stopping the payment.

Payment disputes

There are some common situations that lead to payment issues:

• You have unpaid invoices - someone owes you money for work done under a written or verbal contract and they simply will not pay.
• You are in dispute - you are in disagreement over whether the goods or services that were asked for were provided or the conditions of the arrangement have been met.

If you are in dispute over a contract and are considering terminating it, read our article Signed a Contract But Want to Exit: What You Need to Know.

Deciding what to do

The type of dispute can vary the options available and applicable jurisdiction.

• Start by reviewing the contract including any obligations and timeframes.
• Seek legal advice about your options.
• Consider the cost and time involved in each option.
• Consider whether they are likely to be able to pay the debt and if writing off the debt might be an inevitable outcome.

QSBC Mediator and negotiation expert, Nicole Davidson, provides important insights in her article:

How much does it cost to litigate a small business dispute?

Important facts

• There may be a time limit to claim (this is usually 6 years).
• Some contracts include terms about how disputes must be resolved.

Tips to resolve issues

To reduce the time and costs associated with resolving payment disputes:

• Follow-up issues promptly.
• Talk to the other party about the issues.
• Communicate politely and assertively.
• Consider arranging a payment plan.
• Send a formal letter of demand
• Keep detailed records

There is no Queensland government department that provides dispute resolution services for unpaid invoice disputes or business to business disputes, except in the construction industry (see below).

If none of the strategies in the 5 steps to resolving business disputes work – you're likely left with deciding whether to:

• try again with a different negotiation or communication strategy, or
• take the issue to court or tribunal.

Deciding debt disputes

In Queensland, courts or tribunals decide disputes over money or contracts, based on evidence. 
Where your matter will be heard depends on the amount or value of the dispute.

• Up to $25,000 – Queensland Civil and Administrative Tribunal (QCAT)
• Up to $150,000 – Magistrates Court
• Between $150,000 and $750,000 – District Court
• More than $750,000 – Supreme Court

QCAT has two possible pathways for disputes:

• Minor debt dispute – Debt disputes involve disagreements with another person, business or company about a fixed or agreed sum of money, valued up to and including $25,000
• Customer and trader disputes – Consumer and trader disputes involve disputes, arising out of a contract between a consumer and a trader (which may be a person or a company) or between two traders, for the supply of goods and/or services valued up to and including $25,000.

The Queensland Small Business Commissioner (QSBC) provides access to low-cost mediation for retail and commercial leasing disputes up to $750,000 including disputes about security deposits. The QSBC cannot recover unpaid money for a business.