Unpaid Invoice

Published: Oct 06 , 2015
Author: Tyler Hall

A friend who is the CFO at a major healthcare provider told me an interesting story.  He received some advisory services from a well-known financial services company. The work was completed and the invoice came to his desk with an amount of $75k to be paid. He thought the sum was outrageous for the work done and decided he would not pay it and wait for them to call him to discuss it. 2 years later there was still no phone call so the $75k was accrued. I don’t want to get into the ethics debate with my friend about whether he should have called or not to sort it out but there are some great negotiation lessons to be learnt!

Firstly, the work completed by the advisory firm may have been of high quality and length which has not been clearly communicated during the job to begin to structure the expectations to the client that the work being done will justify the $75k bill.

Secondly, it was fascinating to hear from my friend that he will not use that advisory service again because of the delay in having a conversation about the invoice. It reaffirmed in his mind that he must have been overcharged because they were not comfortable in having a conversation with him about it.

Lastly, my friend was willing to pay the invoice or part of the invoice if the firm could explain in more detail the work done. As a result of lack of confidence and a pessimistic mindset from the account manager to have a difficult conversation with the client has led to a loss of revenue and a significant client.

Do you have any similar stories to share?


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About the author:

Tyler Hall
Tyler's negotiating experience was gained in the entertainment industry through a range of leadership roles, which included marketing, sales, relationship management, strategic planning and brand development.

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As a negotiation specialist, I’m often asked what the best course of action is when the other party has all of the power. Maybe you are dealing with an incumbent or selling to a duopoly… so it may even feel like it is true that they have ‘all of the power’. While we could talk about what you do when it is true, my experience is that people typically have a lot more power than they might realise.

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