Tuesday, 31 March 2015

The importance of ‘terms and conditions’ in business

Many small businesses and startups feel that setting out good terms and conditions is not a priority. However, getting it right can ensure that your businesses cash flow stays healthy. When starting a business, the never-ending list of things to do can seem daunting, leaving many elements to go unnoticed. Many startups focus on ensuring that their product is market ready, sourcing customers and marketing the product. Sorting out terms and conditions is definitely not at the top of the to-do list.

However neglecting this vital step in your to-do list can impact your cash flow through delayed payments as well as having to pay for materials before you have even taken any payments. The long-term effect of this could lead to unnecessary money and time being spent on debt collections.

Late payments within small business are now a common occurrence as customers often deprioritise bills from smaller companies. However with the right terms and conditions in place, your business can be assured that it gets paid first. Getting your terms and conditions right equals no more excuses!

Protecting your business is essential. Terms and conditions should be specific and never vague to avoid uncertainty and any misunderstandings. Covering yourself will help to ensure that clients have no opportunity to go back on their word.  Putting your terms and conditions in writing is an absolute must! Without any written agreement, there is no proof and without proof late payments can occur.

The founder of Enterprise Nation, Emma Jones has argued that “essentially, having terms and conditions protects you as a business. Terms and conditions certainly have an important role to play when it comes to two parties (customer/supplier, joint venture partners) understanding their duties, rights, roles and responsibilities."

So what should terms and conditions include?

Emma Jones also goes on to state that terms and conditions can also save a lot of money by addressing all issues at the outset. This in turn avoids disputes later on about what might or might not have been agreed." Points which should be included in your businesses terms and condition vary depending on your type of business, however you should consider including:

·         Clear description of products/services provided

·         Setting out late payment terms (deadlines)

·         Guarantees/warranties offered

·         Delivery times

·         Queries?

·         What happens if either party fail to deliver, pay or terminate contract

·         Terms of the agreement

·         Notice required

·         Law governing the contract

It is important to note that there is no legal requirement to include terms and conditions on your company’s invoices. However many print their terms on the back to avoid any potential disputes or late payments.

If you have an existing business or are a startup, LawStore Business can help you! LawStore Business provides legal packages for businesses at affordable prices. Our cost effective, fixed fee solutions enable business to focus on their marketing and customers while we do the rest.
Our packages can also be bespoke and tailored to your business’s needs. Our services include:

·         Terms and conditions
·         Privacy policy
·         Contract of sale
·         Company formation
·         Legal advice

If you are a medium, large sized or fast growth company that needs more extensive assistance, our team can work with you to put together a bespoke, fixed fee package tailored to you and your business. To find out more about making a tailor made package for you and your business simply call us on 0845 603 6544 or contact us online today!

If you would prefer to use one of our existing packages simply click here.

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