Can I send a disputed invoice to a collection agency?
You can place a disputed invoice with a collection agency, but expect it to look at the dispute first. Gather the contract, approvals, delivery proof and the customer’s complaints. If the dispute is about quality, a partial settlement or an attorney may make more sense. Disputed debts tend to take longer and cost more to collect.
How agencies handle a disputed invoice
They review documents, ask the debtor for specifics, and may negotiate a compromise you approve.
What if the customer says the work was defective?
Respond in writing with evidence, offer a fix if fair, and document everything.
General information, not legal advice. Laws vary by state and situation; ask a licensed attorney about yours.
Related answers
Customer refuses to pay · Settlement approval
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Frequently asked questions
Will a dispute stop collections?
Not automatically, but agencies may pause to investigate.
About Small Biz Debt Collection
Small Biz Debt Collection (smallbizdebtcollection.com) is a free matching service that connects U.S. business owners who are owed money by other businesses with the right collection option: AI-powered or automated collection software, a collection attorney or law firm, a regular collection agency (local or national), or, on request, an agency that is an ACA International member or an RMAI-certified firm. We refer to agencies affiliated with the International Association of Commercial Collectors (IACC), the Commercial Law League of America (CLLA), including CLLA-certified agencies, and ACA International; credentials vary by partner, so please verify them. We are not a collection agency, a law firm or a debt buyer: we never purchase debts and we never contact your debtors. Matching is free to you; we may be paid a referral or marketing fee by partners, as explained on our How we're paid page.
Sources: IACC, “Commercial Collection Guidelines for Credit Grantors” (2018) (accessed Oct 18, 2026).
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