In these times of rising interest rates and prices generally, it is vital to keep your cash flow in the green and one way is to make sure your customers know when you expect them to pay and how much. You would be surprised to know how many business owners don’t actually state this! 
So to make sure you get paid, you need to have clear payment terms between your business and your customers. A handshake just won’t cut it I’m afraid. Even if you don’t have formal terms & conditions yet, an exchange of emails setting out what you will be providing and what you are expecting in return will amount to a contract.It’s just not as tidy and can lead to misunderstandings…
As a minimum, your terms & conditions ( or your email confirming the deal) should have the following clauses:
- A term that states the overall price for your goods or services and whether VAT is included
- A term that states when you will be invoicing for the goods or services e.g. once you have provided them or a deposit upfront followed by a balance payment
- The date by which you expect to be paid. Normally your invoice will have words such as “Payment is due within 30 days of the date of this invoice“. Don’t be tempted to say “within receipt of the invoice..” otherwise your customer could argue that they never received it and hence don’t have to pay!
- The method of payment. Make it is easy as possible by stating your bank details clearly on the invoice or sign up to Paypal or other payment processor. You don’t want your customers putting cheques being put in the post with the hassle then of paying them in and being charged for the privilege!
- A term explaining what will happen if they don’t pay on time. You may wish to stop work on their matter or stop supplying the goods. You could charge interest or as a last resort terminate the contract. Its up to you.
If you are not sure about whether your terms & conditions have the right wording, give us a call and we will be happy to help.
