If you do not have an up-to-date terms and conditions letter, we would highly recommend getting one as 2016 gets underway. All businesses, big and small, should have clear terms and conditions in place, especially when it comes to payment terms and the penalties of non-payment. While much of this is now enshrined in legislation […]Read More
If you do not have an up-to-date terms and conditions letter, we would highly recommend getting one as 2016 gets underway.
All businesses, big and small, should have clear terms and conditions in place, especially when it comes to payment terms and the penalties of non-payment.
While much of this is now enshrined in legislation and law, there is still the option to overrule the standard legislation with mutually agreed terms.
This can lead to doubt if, for example, a client interprets something you say in an early email to them as meaning they do not have to pay promptly – or at all.
Even if any such grey areas would not stand up in court, you might still not want to bear the expense – both in terms of time and monetary cost – of going to court over a dispute.
A clearly worded terms and conditions letter sent to new clients early in your working relationship helps to make sure there is no doubt or confusion over what has been agreed.
It’s not just about payments, either – terms and conditions can set out exactly what is expected of both parties, including any information or upfront payments you need from your customer, what you will supply to them in return, any agreement to aftersales service, and finally those all-important aspects of payment, including how much, when it is due, and what will happen if it’s not paid on time.
By sending out a terms and conditions letter to new customers, you set all of this down in writing, and crucially you make sure the customer responds and acknowledges the terms, so that they can be held as legally binding later.
It is, in effect, a contract between you and the customer, and it should govern what actions are taken by both parties, not simply enforce a payment deadline on the customer – although of course as the supplier, your own payment terms are likely to be in place to protect you more than they protect your clients.
We would recommend regularly reviewing your terms, particularly your payment terms, in light of changing legislation and market conditions.
Recent years have seen new legislation from the EU and government action within the UK to tackle the ‘late payment culture’ said to exist among businesses, and your terms may need updating if they are close to five years old, or even older.
Even newer payment terms could do with refreshing if your business has changed in any notable way since they were written, or if you are operating within a market whose supply chains have changed too.
Whatever the reason, a new year is a good time to make a change, and to enforce it on existing customers if appropriate too – while describing it simply as your ‘new approach for 2016’.
To find out more, contact us and we can help you to decide whether your terms and conditions need amending or replacing as we move into the new year.