Arbitration.Inc
Every business that bills other businesses has a few of them: an invoice of a few hundred or a few thousand dollars that has gone ninety days without payment, from a client who has stopped answering. It is too large to ignore and too small to take to court. Most of them end up written off.
Why small invoices get written off
The arithmetic is simple. Paying a lawyer to file a lawsuit, serve the other side, and see the case through can cost more than the invoice itself, and a contested case can take many months. Small claims court is cheaper, but it has dollar limits, it usually means someone from your team appearing in person on a weekday, and the rules differ in every place you might have to file.
The major traditional arbitration forums are not built for this size of dispute either. Their published filing and administrative fees commonly run $1,500 to $10,000+ per case before the arbitrator is paid, and a case can take 90 to 180+ days to reach a decision. Against a $1,200 invoice, none of those options make sense, so the invoice moves to the write-off column.
What a write-off does not do
Writing an invoice off closes it on your books. It does not decide the disagreement behind it. If the client believes the work was incomplete, or out of scope, or never approved, that question is still open. If they simply stopped paying, that is still open too. Nobody neutral has looked at the contract, the emails, and the delivery record and said who is right.
Where arbitration fits
Arbitration is a private way to resolve a dispute without going to court. Both sides put their documents and their positions in front of a neutral arbitrator, who reviews the record and issues a written decision called an award. The award is binding, and under federal law a court can confirm it.
It rests on one thing: an agreement to arbitrate. Many service agreements, master services agreements, and terms of service already contain one. If yours does not, you can add one to your terms for future work, or the two sides can agree to arbitrate a dispute after it arises.
What filing one looks like on Arbitration.Inc
Arbitration.Inc is an online arbitration forum built for disputes too small to litigate. You file the claim online: what the work was, what the invoice covers, what you are asking for, and your evidence, such as the signed agreement, the invoice, delivery confirmations, and the correspondence.
The client is served a notice of arbitration and gets a fair chance to respond with their own position and evidence. A neutral arbitrator then decides the case under our published procedural rules, which are built to reach an award in about two weeks. If the client does not take part, the case proceeds without them, and the claim still has to be proven on the evidence.
Before you file
Find the agreement to arbitrate in your contract or terms, and gather the record in one place: the agreement, the invoice, proof of delivery, and any messages about scope or payment. A clean record is what an arbitrator decides from.
Arbitration.Inc is a neutral forum. We decide cases; we do not act for either side, and we do not give legal advice. If you are unsure whether arbitration fits your situation, a lawyer can tell you.
New to the terms? Read what arbitration is or the plain-English glossary. See how a case runs for B2B Invoices.