Late payment of invoices is an unfortunate fact of life for many small to medium sized enterprises businesses, as customers often give lower priority to bills from small firms.
Holmes & Hills Debt Recovery Solicitors know that if the right Terms and Conditions of payment are in place, however, you can ensure that you get paid on time, making your customers excuses for slow payments non-existent.
In the early days of starting up a new business, there may be a seemingly endless list of tasks to complete. Consulting a commercial lawyer to assist you in drafting your Terms and Conditions of trade is not always at the top of the list. However, neglecting this aspect of your business could seriously impact your cash flow through delayed payments. You could find yourself making payment for materials and the like upfront, while still awaiting payment from customers you invoiced 3 months ago.
By not specifying your company’s Terms and Conditions, you can put your company at risk of uncertainty and misunderstandings. It’s imperative to establish the arrangement for payment between yourself and your new customer, in writing, from the start. They must not be able to find a loophole within which they could go back on their word. Similarly, you don’t want to end up in a situation where your customer thought he would pay at the end of a project, but you were relying on him paying in stages as the project progressed. This could have a serious impact on cash flow.
Ultimately, you could waste valuable time and resources chasing late payments, and as a result have to spend your hard-earned money on a debt recovery service to assist you.
Holmes & Hills debt recovery specialist Angela Watson advises that your company’s Terms and Conditions should read like a recipe book for doing business.
Using a Commercial lawyer to draft the terms for you should mean there is no ambiguity on what should happen in any given situation, and well drafted Terms and Conditions can save your company money by addressing many potential issues at the outset.
Each company is different, so each set of Terms and Conditions will be different too. Don’t be tempted to try and save yourself some money by simply copying another company’s Terms and Conditions. Each company is unique, with specific requirements and functions, operating in a certain way, and obviously will therefore have different needs and wants from their Terms and Conditions.
Ask your Commercial lawyer to clearly set out your Terms and Conditions, and give particular consideration to your payment terms.
Payment terms will also vary; some companies allow their customers 15 days from the date of their invoice for payment, while some companies ask for payment on the 30th day of the following month. Some companies give 28 days from the date of their invoice as their due date for payment.
If your business needs assistance writing Terms & Conditions, collecting payment for unpaid invoices or any other debt recovery matters, contact Angela today on