What are your businesses terms and conditions?
Here is some advice on business terms and conditions. For example, 60 day terms has been a growing trend for several years now and one that should be approached with caution.
Ideally, 60 day terms, should be provided to those clients who have proven to be responsible with your current terms.
However offering a discount that is sufficiently lucrative for clients to want to pay early and affordable to your business is generally more effective.
Most companies will borrow on their line of credit to get worthy discounts. You need to stand firm though on not allowing the discounts if the payment is received late.
Advice on business terms and conditions
Are your customers up to date with your terms and conditions?
The way to ensure that your terms of business are met is by communicating your credit terms. All customers should be aware of the payment period, discount for early payments and return policies that apply to an invoice. These terms and conditions are integral to the cash flow of your business.
Especially when it comes to your suppliers or your ability to pay wages for work already supplied.
Ensure to invoice as soon as the work has been completed or the item(s) have left your premises, clearly stating your payment terms and due date. Leave no misunderstanding as to when you expect to get paid.
If your terms change at all, new terms and conditions must be forwarded to all existing and new clients and agreed to upfront.
Advice on business terms and conditions and how you conduct business
Do your suppliers have confidence in your ability to pay on time?
Building confidence with suppliers is a major key to cash flow within your business.
Therefore you may also want to consider extending payment terms with all of your suppliers in advance.
Reviewing your credit terms and discuss the idea of 45 day terms rather than 30 days.
Allow for the roller coaster of payments by your clients. Arrange to pay some bills monthly or quarterly to avoid large sums of cash being withdrawn from your account at one time.
Any step you can take to keep cash flowing, no matter how inventive, that has proven efficient, is worthwhile.
TJD Accounting Services
319 Keilor Road