We often stress the importance of having payment terms and conditions in place, particularly if debt recovery action becomes necessary later.
For example, you definitely don’t want to reach the 30-day deadline on an invoice, only to discover that your client genuinely believed they had agreed to 120-day payment terms.
Here are a few other do’s and don’ts to keep in mind when bringing payment terms and conditions into force on a client account.
Do make sure your T&C’s suit the current project or order – generic T&C’s are fine for some small businesses and sole traders, but if your business changes for each customer, your contracts may need tweaking too.
Don’t forgo the terms because you don’t think they’re suitable – it’s crucial that if the wording needs tweaking, you get it done and still get the customer to agree.
Do get the customer’s agreement in writing – you can’t just have payment terms sitting somewhere on your website, as the customer won’t necessarily know that they’re there.
Don’t think “I’ll send them over later” – make it a priority, so you know what you have agreed to before you start running up a client’s bill.
Do make your payment terms easily available – send them with your initial quote or response to a new customer enquiry, or post them on your website and link prominently to them in your customer emails.
Don’t send them out as a footnote on your invoices – it’s already too late to enforce them on the work you have already done, once you’ve reached the invoicing stage.
Do stick to your side of the terms and conditions, whether that means allowing a certain period for payment, or a discount for prompt payment, or any other incentive you may have offered.
Don’t let customers escape their commitment either; if you’ve done everything you agreed to, they should too, so don’t be bullied into retrospective discounts or deadline extensions.
Do stand firm on any infringements, and enforce the clauses that allow you to charge penalty fees, for example, or halt subsequent work until payment is received.
Don’t feel duty-bound to punish one-off, genuine mistakes; you’re still in control, so if a valued and trusted client misses a payment by accident, give them the benefit of the doubt if you want to.
If you would like help with your terms and conditions, please don’t hesitate to get in touch by either filling in a contact form or calling 0808 256 5012.