10 rules for writing terms and conditions for your invoices

Strong terms and conditions for your invoices are extremely important to your small business. If your invoices are difficult to understand or confusing to read, it can seriously hurt your cash flow. Why? Mainly because if the customer can’t understand the invoice from him, he won’t pay. Your client wants to be sure that he is being quoted the right amount for the goods or services he requested.

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 action will you take if the customer does not pay the bill?
• What will happen if you are late in delivering your services or products or services to the customer?
• What will you do if the customer is not satisfied with your products and services?
• What will happen if the product or service is damaged while being provided by your customer’s delivery service?
• Is there an incentive if your clients pay in advance?
• What type of interest rate would you like to charge for late payments?
• What if the client is interested in renegotiating the contract right after both 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 a calculation error in an estimate or quote, who is going to pay for it?
• Who is responsible if a product breaks after it was purchased?
• What strategy will you undertake if the agreement or contract is terminated?

It may take a bit of time to think and formulate this list, but as soon as you’ve written all of this down, you’ll be in a position to write future terms and conditions in an instant with the other clients you’ll add. your customer list. Most importantly, having the most appropriate terms and conditions for your business will ensure that you are compensated and take care of your business if legal action is ever taken.

2. PROVIDE ALL THE CRUCIAL PARTS OF AN INVOICE.

Presenting all the important elements of an invoice will not only speed up the payment process, but 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 early payment or application of charges for late payments

Before mailing the bill, make sure all the information is correct and that it is being sent to the correct person. Any mistakes can easily slow down the checkout process and make it look less than professional.

3. CLEARLY EXPLAIN THE PRODUCTS/SERVICES OFFERED OR THE SCOPE OF THE PROJECT.

This is by far the most relevant part of your invoice terms and conditions. Why? Because it describes what the customer is paying you in particular.

For example, if you’re hired to build a website for a client and it’s more than the client imagined, having a description of the time and expense it took to complete the job answers any questions or concerns related to the job. the final amount of the invoice.

4. REDUCE YOUR PAYMENT TERMS

This should be {kind of} obvious, but when you give customers a long time to make a payment, the longer it takes you 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 2 full months for 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, check 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 WARRANTIES AND GUARANTEES

It is not uncommon for any business that sells goods and services to give warranties and endorsements far too often. It makes them appear more legitimate and reputable and gives security to the customer. 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 warranty.

6. CHASE THE PURPLE PAYMENTS.

Typically, there will be times when customers do not pay invoices by the due date. Instead of being passive, you need to be persistent in tracking down those particular late payments.

Regularly track your customers’ payment due dates and contact them by phone, email, or mail if they haven’t paid you by the due date and have late payment fee terms on your bills, such as charging interest on overdue payments, which a trusted cloud-based billing software will do for you automatically.

In the event that you are unable to contact the late paying customer, 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 from the start.

7. ONE SIZE DOES NOT FITS ALL.

Make sure your terms have been created specifically for your company. Remember, your business does not have the same requirements, resources, and customers that other businesses have. 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 meet your particular needs.

A template is really good to get you started and steer you in the right directions, but ultimately you need to write the terms and conditions that best suit your business and clientele.

8. ALWAYS BE PROFESSIONAL AND COURTEOUS.

Being courteous can have a beneficial influence on your business. Simply adding a phrase like “kindly pay your bill within twenty-one days” or “thank you for your business” can actually increase the number of bills paid by more than 5 percent! This may not sound like a lot, but this can generate thousands of US dollars per year directly into your bank account.

In addition to helping you get paid faster, being professional and courteous can easily enhance your brand image.

9. MAKE THE TERMS AND CONDITIONS EASY TO READ.

Keep the language in your conditions and terms simplified and intuitive. Put yourself in the shoes of your clients’ customers and realize that not everyone is familiar with industry terminology and even accounting terms, such as “net 30.”

Also, don’t try to hide everything on a single page by using small font so your customers can’t read the fine print. It will look misleading to your customer and ruin your reputation (regardless of there being nothing misleading on your invoice).

10. WHEN IN DOUBT, ASK FOR HELP.

When all else doesn’t work out as expected, or you end up in a sophisticated or specialized situation, don’t hesitate to seek guidance from your mentor, fellow business managers, or your lawyer. These are people who have experience writing terms and conditions and are more familiar with the laws and regulations than you are.