At the Cash Protection Agency, we now offer a Terms and Conditions service, providing you with a customised set of Ts & Cs to give to your customers, or checking through existing terms you may have in place.
But why is this important – surely the law protects you against any wrongdoings by your clients? Well, yes and no, so here are five crucial things to bear in mind.
1. Mutual consent
First of all, remember that most aspects of the law governing payment for the provision of goods or services are optional – you are not obliged to chase debts, or to petition for a CCJ or bankruptcy due to an unpaid invoice.
Having clear Ts & Cs in place upfront lets your customers know that you are serious about expecting prompt payment, and will not let them simply disappear into the night without paying you.
2. Get in first
Next, you can bet that if you don’t have terms and conditions, your customer will, so take advantage of your status as the supplier and get in first with a set of terms you’re happy to work to.
If you end up having to agree to the customer’s Ts & Cs, it’s likely that they’ll ask for 60-day or 90-day payment terms, or even longer in the case of big brand-name clients, so demanding 30-day terms upfront is essential to maintain healthy cash flow.
3. Fees and charges
Under late payment legislation, you are already entitled to add certain penalties and statutory interest to overdue invoices, but you’re likely to encounter opposition from your customer if you try to do so.
Spelling it out in your Ts & Cs just cements the fact that they will have to pay up – there’s no way to claim ignorance of the rules if they’ve signed and agreed to your terms from day one.
4. Bespoke terms
It might seem tempting to ‘borrow’ terms and conditions from somebody else, but this is fraught with pitfalls – and it’s not unknown to see Ts & Cs that mention the entirely wrong currency, if they were found online.
Our bespoke service takes a set of terms and conditions that suits your industry area, but we then spend up to a full hour editing them to make sure they are absolutely spot-on to your needs.
Even if you are an individual contractor or freelancer, having a set of terms and conditions unique to you shows professionalism, and this can help to reduce the risk of clients trying to take you for a ride.