It’s only reasonable to want to give your payment terms immediate effect, so that all of your dealings with a particular customer are protected by your Ts & Cs of payment.
But is this necessarily the case? It can depend on how obviously you present your terms document to the client, so don’t be afraid to really hammer it home.
We always say it is essential to provide a copy of your payment terms to new customers as early as you can, so that they can be applied to all of the work you do.
Simply attaching a PDF to the invoices you send out for work already done is not good enough – you can’t expect to apply terms retrospectively if the customer was never aware of them before.
But equally, if you just quietly attach a PDF to your initial contact with the client, you can’t assume that it will be seen, especially if the recipient’s mail software or webmail platform turns images and text signatures in the email into attachments too, as a PDF or Word document can easily become lost among these.
To make your payment terms immediate, you need to be certain that the client has seen them and has agreed to them, whether explicitly or implicitly.
Either attach your payment terms PDF to your email to the client, or upload it to an accessible location on your website, and then link to it in the email.
Crucially, you should make a clear reference to the document within the body text of your email – don’t just put a link in your automated email signature where it might be missed.
Specify that the client must raise any objections with your terms within a set period – for instance, seven days, or before any work is carried out – or that a failure to do so will be taken as acceptance of your payment terms.
In this way, although the customer might not specifically say that they have accepted the terms, you can demonstrate that they were aware of your conditions from the outset, and did not raise any disputes or provide payment terms of their own in contradiction.
This makes it much easier to immediately begin applying the terms to the work you do, and to the payments you seek from the customer, including any upfront deposit or partial payment towards the final invoice amount.
Always remember to keep a copy of this initial email, so that if the customer does raise a dispute at the invoicing stage, you can show that they were aware of your terms and did not reject them – in this way, you should have a much stronger argument if you end up taking them to court over an unpaid bill.
If you need assistance with payment terms please do not hesitate to: get in touch with the CPA team