One of the most important pieces of paperwork to get right are your terms and conditions for selling goods – it might seem like they’re just there to set a deadline for payment, but they can do much more besides.
Terms and conditions for selling goods – rather than services or other supplies – are particularly important as they can spell out who owns the items until payment is made in full.
Although it might sound strange, without clear written terms, it can be difficult to prove that you still own goods after they have been supplied, but before they have been paid for.
During this period, you have effectively provided credit to the customer – allowing them to obtain a certain value of items from you, on the understanding that they will pay later.
But you need to be able to act appropriately if they do not pay when you expect them to, and your terms and conditions can outline the steps you will take to either recover the debt, or recover the goods.
In more complicated supply chains, there may be other concerns too; for example, if you buy your stock in to order, and the customer cancels that order, will you be able to return the stock?
If you will be left with items you cannot return but are unlikely to be able to sell, your terms and conditions need to outline some form of protection – either strict conditions under which orders may be cancelled, or a requirement of part-payment to cover your own costs, and so on.
The worst-case scenario is if you are left with a product that has already been personalised irreversibly in some way, and therefore cannot be returned to the supplier or sold to a different customer, so your terms and conditions for selling bespoke goods should be careful to prepare for this situation.
You might want to limit your risk in other ways, for example by requiring a deposit to be paid upfront; or you could offer a small discount for very prompt payment, to encourage customers to settle their account in full well before their deadline.
Whatever terms you choose to offer, they should be fair on both parties – after all, you need your customers to agree to them in the first place – and you should provide new customers with a copy upfront, not just when they receive their first invoice.
By doing this, you both begin your professional relationship with a clear understanding of what is expected of you, helping to reduce the risk of later disputes, and setting out clear terms to resolve any disagreements that may arise.