Terms and conditions are extremely important; they ensure your customer knows right from the outset what is expected of them and how the business relationship will work, along with setting out payment terms and clauses for non-payment.
Ideally you should obtain a signature accepting the terms outlined. Your terms should include a specific payment timescale, for example 30 days from the date of the invoice, and include the consequences of late payment and any penalties that will be made in this instance.
If the transaction is business to business you have a statutory right to claim interest and costs as per The Late Payment of Commercial Debts (Interest) Act.
We would also recommend including a retention of title clause in the terms, which means that you retain ownership of the goods until full payment has been received. This can only be used for the supply of goods and not services, but can be very useful if appropriate.
If you do not currently have terms and conditions in place or you are unsure whether your current ones are clearly defined and fit for purpose, please contact a member of our team for more information.
Posted: July 29th, 2014