As a business owner, you know that invoicing is an essential part of the process. But did you know that setting out clear and concise Terms and Conditions on your invoices is just as important? This will ensure that your clients are aware of what is expected of them and what will happen if they don’t meet those expectations. And whilst you may have lengthy detailed T’s & Cs on your website or on the original confirmation of the order, a summary of these on the actual invoice can help ensure you’re paid in a timely fashion with minimal queries.
Why are Terms & Conditions important?
Terms and conditions are there to protect your business. By having these in place, you are setting out the rules of engagement for your client and setting expectations.
If you don’t set out clear terms and conditions on your invoices, you run the risk of having misunderstandings with your clients about what is expected. This can lead to late or non-payment, which can be detrimental to your business.
What Should Terms & Conditions Include?
Your terms and conditions should be specific to your business and cover all eventualities. However, there are some key points that should be included in all terms and conditions, though not all will make it onto the final invoice document:
- A clear outline of the services/products that are being provided.
- The timeframe under which these will be delivered.
- Payment terms – how much is due and when.
- What happens if the client is not happy with the service.
- What happens if the client wants to cancel the contract.
- Your details – name, address, contact details etc. For limited companies, this includes registered addresses and numbers.
- The client’s details – name, address, contact details.
- Information on payment methods.
- Past due payment fees.
You should also make sure that your clients know who to contact if they have any questions or queries about the invoice.
What Happens if Your Payment Terms and Conditions are Not Met?
If your terms and conditions aren’t met, then you have a few options. You can of course always choose to do nothing and hope that the client pays eventually. However, this isn’t advisable as it doesn’t send a very strong message about taking your business seriously.
You should, of course, be undertaking regular credit control activities including picking up the phone to establish why items have not been paid, you could send them a series of chasing letters/emails, reminder statements or even a past due invoice with an added late fee. However, if they still don’t pay, then you might have to take more drastic measures such as issuing solicitor’s letters, instructing a collections agency or ultimately taking them to court.
But, if your business is already struggling with constant late payment issues due to not being able to find the time to chase debts, then an invoice finance agreement with Partnership Invoice Finance could be the perfect solution.
What is Invoice Finance?
Invoice finance is a recognised tool that businesses use to manage their cash flow, grow their business, and outsource their credit control. It is a safe and flexible alternative funding facility that is often easier to secure particularly for SMEs than other forms of finance.
Rather than trying to do everything yourself, you have access to professional outsourced credit control, 5 days a week throughout the year, with no break for holidays, or those urgent jobs that keep you away from chasing the money you are owed; all this plus access to your cash when you need it.
- is ideal for small-medium businesses selling to other businesses on credit terms.
- provides access to cash without the business having to sell inventory or other assets.
- is flexible and provides finance that grows as you do.
- doesn’t require you to provide additional personal collateral, which is often required when you take out loans from banks and other financial institutions.
- has a straightforward application process. Invoice factoring with Partnership is quicker than the Bank – typically a facility is agreed upon within 24 hours with the first drawdown of cash to you shortly after.
- is an efficient and flexible way of borrowing money.
- gives you access to the value of invoices before they are paid-typically within 24 hours of raising them.
- allows you to decide to either have your whole turnover funded or choose which customers your business would like to factor.
How do I find out more?
By contacting an accredited company such as Partnership Invoice Finance, we will not only help you with your credit control and cash flow; we also offer our clients the security and the comfort of knowing this vitally important aspect of running a business is taken care of – one less thing to worry about. We are a trusted accredited funder and will work with you to ensure that your invoice finance plan is tailored to suit your business needs.
Contact us today for more information.