Strong invoice terms and conditions are extremely important to your small business. If your invoices are difficult to understand or confusing to read, it can cause severe damage to your cash flow. Why? Mainly because if the customer can’t understand their bill, they won’t just pay. Your client wants to be sure that the proper amount of the goods or services they requested is being priced.
1. Start thinking about all the possible legal issues and scenarios.
The first thing to do before writing your terms and conditions is to list all possible legal obstacles or circumstances that could occur.
As an example:
- What actions will you take if the customer does not pay the invoice?
- What will happen if you are late in delivering your services or products or customer service?
- What will you do if the customer is not satisfied with your goods and services?
- What will happen if the product or service is damaged by being provided by your customer’s delivery service?
- Is there an incentive if your customers pay in advance?
- What kind of interest rate would you like to charge for late payments?
- What if the client is interested in renegotiating the contract right after the two parties agree to the terms and conditions?
- Can your customer request a refund? If so, what scenarios would allow this?
- What will happen if the scope of work is expanded?
- If there was an override on a quote or quote, who will pay for it?
- Who is responsible if a product breaks after purchase?
- What strategy will you undertake if the contract or contract is terminated?
It may take a little time to think and formulate this list, but as soon as you have all of this in writing, you will be in a position to write future terms and conditions in an instant with the other clients you will be adding to. your customer list. Most importantly, having the most appropriate terms and conditions for your business will ensure that you receive compensation and take care of your business if legal action is ever taken.
2. PROVIDE ALL THE CRUCIAL PARTS OF AN INVOICE.
Presenting the most important elements of an invoice will not only speed up the payment process, but will also answer any questions the customer has regarding the goods or services you provided.
When generating invoices, be sure to include:
- Your logo
- Invoice number
- Your contact information
- Your customer’s contact information
- The expiration date
- The products or services you provided and their costs.
- The forms of payment you accept
- Discounts on invoices for prepayment or imposition of late fees
Before sending the invoice, make sure that all the information is correct and that it is sent to the correct person. Any mistake can easily slow down the checkout process and make it appear less professional.
3. CLEARLY EXPLAIN THE PRODUCTS / SERVICES PROVIDED OR THE SCOPE OF THE PROJECT.
This is undoubtedly the most relevant part of the terms and conditions of your invoice. Why? Because it describes what the particular customer pays you for.
For example, if you are hired to make a website for a client and it is more than what the client has imagined, having a description of the time and expenses it took to finish the job answers any type of questions or related doubts with the final sum of the invoice.
4. SHORTEN YOUR PAYMENT TERMS
This should be {it’s a bit} obvious, but when you give customers a lot of time to make a payment, the longer it takes to get paid, which in turn leads to slower cash flow.
So if you have a customer 45 days to pay an invoice, for example, and that customer paid you a couple of weeks late, that means you’ve waited a full 2 months to get a payment.
A payment term of 30 days or even less is the standard when it comes to billing simply because it is helpful in maintaining cash flow. However, do review your industry billing standards and check with the customer when their payment cycle runs. These factors can help you establish your payment terms.
5. HIGHLIGHT GUARANTEES AND GUARANTEES
It is not unusual for any business that sells goods and services too frequently to provide warranties and guarantees. It makes them look more legitimate and respectable and gives the customer security. If you provide a warranty or guarantee, make sure it is clearly described in your terms and conditions.
Never forget to address issues such as situations where the customer / customer loses their warranty or guarantee.
6. MAKE LATE PAYMENTS.
Generally, there will be times when customers will not pay bills before the due date. Rather than being passive, you need to be persistent in tracking down those particular late payments.
Keep track of your clients’ payment due dates regularly and contact them by phone, email or mail if they haven’t paid you by the due date and set late fee terms on your invoices, such as Charging Interest on More Than Overdue Payments – What Reliable Cloud-Based Billing Software Will Do for You Automatically.
In the event that you are unable to reach the customer who paid late, or if you do not respond to follow-ups, you may need to send a collection letter, hire a collection agency, or take it to court. Make all of this information very clear up front.
7. ONE SIZE DOES NOT FIT ALL.
Make sure the terms are created specifically for your business. Remember, your company does not have the same requirements, resources, and customers as other companies. Because of this, you can’t just copy and paste the terms and conditions from a commonly used template or another company, as they probably won’t address your particular needs.
A template is really good to get started and steer you in the right directions, but ultimately you need to write down the terms and conditions that best suit your business and clientele.
8. ALWAYS BE PROFESSIONAL AND CUTE.
Being courteous can have a beneficial influence on your business. Simply adding a phrase such as pay your invoice within twenty-one days “or” thank you for your business “can actually increase the number of invoices paid by more than 5 percent. This it can result in thousands of US dollars per year directly into your bank account.
In addition to helping you get paid faster, being professional and polite can easily enhance your brand image.
9. PLEASE KEEP TERMS AND CONDITIONS COMPLICATED TO READ.
Keep the language in its terms and conditions simplified and intuitive. Put yourself in the shoes of your clients’ customers and understand that not everyone is familiar with industry terminology and even accounting terms such as “net 30”.
Also, don’t try to hide everything on one page by using a small font so that your clients can’t read the fine print. It will seem complicated to your client and independently ruin your reputation (if there is nothing complicated on your bill).
10. IN CASE OF DOUBT, ASK FOR HELP.
When everything else doesn’t work out as expected, or you end up in a sophisticated or specialized situation, feel free to seek guidance from your mentor, fellow business managers, or your attorney. These are people who have experience writing terms and conditions and are more familiar with laws and regulations than you are.
