At first glance, a Terms and Conditions document does not seem all that impressive. It does not evoke the same level of attention and respect from clients that a contract or an invoice usually does. Many people skip over the T&Cs section of an agreement without ever reading it. Because of this business owners tend to neglect their company’s Terms and Conditions, relegating it to the bottom of their priority list.
But forgetting about this piece of document is a huge mistake because the Terms and Conditions is actually crucial for the success of a business. It is perhaps the most important document your company can have.
Functions of Terms and Conditions
Essentially, the Terms and Conditions outline the specific details of any and all transactions that occur between you and your clients. It contains vital information like:
- what products and/or services are provided
- when, where, and how these products/services will be provided
- how much the client needs to pay
- when, where, and how the client must pay the company
- what happens if the company fails to deliver the products/services
- what consequences and fees will be imposed in the event of late or non-payment
- which law governs the contract/agreement
By clearly stating these details in the Terms and Conditions, you can ensure that your client knows exactly what to expect from your business transactions. They will also know their rights as customers, reassuring them that they are in good hands. Moreover, this document serves as a guarantee to potential new clients that you will deliver the products and/or services that they require from you and that your transactions will run smoothly.
Benefits of Clear Terms and Conditions
Clear T&C avoid misunderstandings.
Clear Terms and Conditions manages the expectations of both the client and the supplier. It informs both parties what their responsibilities are to each other and what will happen in case they are unable to fulfil those duties. This way, a business can successfully avoid problems and misunderstandings with their clients.
Professionally drafted T&C provides legal protection.
Aside from outlining your responsibilities to clients, a professionally drafted Terms and Conditions also establishes the limits of your liabilities. It provides disclaimers that can help protect your business in the event that disputes are taken to court. If this happens, the legal proceedings will be a lot simpler and faster, not to mention cheaper.
T&C minimizes late payments.
Another benefit of well-crafted T&Cs is that it helps ensure that you get paid on time for the products and service you provide. If you present this document at an early stage, clients will know when they need to pay you and can make the necessary adjustments or notes to their budget. This way, both you and your client can properly manage your cash flow.
T&Cs are useful for finding alternate means of funding
Your Terms and Conditions may also come in handy when you apply for cash flow or invoice financing solutions to fund your business growth. Lenders will want to see your Terms and Conditions as it proves that your business is well protected from any risks. Plus, it helps ensure them that you have a history of on-time payments from your clients.
How to Create Effective Terms and Conditions
Contrary to popular opinion, creating effective Terms and Conditions does not have to be expensive or complicated. With the help of experienced professionals, you can quickly produce T&Cs that fits your company’s needs and goals. This is exactly what we do here at Slater Byrne Recoveries. We have a team of specialists who will gladly assist you through the process of creating Terms and Conditions that will serve your business. Plus, we will help specifically address the following in your T&Cs document:
- debt recovery costs to be added on top of the outstanding amount if it is outside your payment terms;
- security clauses—including real property charging clauses to allow a caveat to be lodged on real estate and PPSR clauses, and;
- the need for a Director’s Guarantee clause.
Liam White joined the Slater Byrne Recoveries team in early 2013. He has worked across the credit & dispute resolution industry for a number of years. He is currently working in a Marketing/Head of Sales capacity at Slater Byrne Recoveries.