We all know Terms and Conditions exist. How often have you ticked the box stating you have read them, when really you haven’t? Blindly clicking away can put you at a great disadvantage if the products or services provided don’t meet your expectations. However, on the flip side, having a comprehensive and watertight set of terms and conditions for your customers to sign can protect you from a whole range of issues and problems. So it is vital you have a good set of Terms and Conditions, which are easy to read and understand, and are welcoming to new clients.
A list of Terms and Conditions is an external document which is given to your clients upon signing up to use your services or receive your goods, unlike the Credit Policy which is an internal document for your staff only.
There are 3 main T&C documents your company could be using depending on what your business is supplying.
1: Credit Application- the most common document usually used for what will be an ongoing relationship with a client.
2: On the back of quotes- tradies often have these on the back of their quotes to seal the deal.
3: Contract or agreement – used by accountants, lawyers or service providers, usually used for one-off short term relationships.
In simple terms, your T&C document covers what you will do in regards to managing your client’s account. When do you put them on hold, when you will charge for late payment? It is partly what we will do for them, but mostly what we do TO them if they don’t stick to the agreements in the document.
It is also what you expect from the customer in return, such as payment details and any rules concerning the application for credit. The document should explain the rights and responsibilities of both parties involved in all transactions.
Your T&C’s need to be agreed upon by both parties, in writing, BEFORE you begin work. A director, partner or sole trader is required to sign your application or agreement, or a Company Secretary is appropriate for a large company. However, an ‘authorised signatory’ is not suitable to cover you if things go sour. This limits your options on recovering your debts and maintaining a working relationship with your clients. For example, if you’re trying to recover debt for an invoice, and the person who signed it has left the company, sometimes no one will take responsibility, saying it’s not my fault, and pass you over to someone else.
Terms and conditions Checklist <– I have included a link to a checklist I created of the essentials you need. You can certainly add more to this list, which reflect you and your business. I always suggest that you seek legal advice when building a list of Terms and Conditions. While the cost of a lawyer could seem a bit too much now, the costs involved in a battle over something that was not included in your T&C document can be so much more.
And finally your T&Cs should be reviewed at least every 2 years. Your company will grow and change. There will be new legislation which comes through parliament, there will be conditions which might have seemed a good idea at the start, but as time goes on they just showed up as inefficiencies to the way you do business. You may have found ad hoc conditions which you introduced now need to be formalised.
During my career in Credit, I have had a great deal of exposure to terms and conditions, and have gained a feeling for which ones work and which ones don’t. While online templates can help you some of the time, not all terms will be applicable to your business and your dealings with others. If you have some questions and would like my opinion and feedback, please feel free to contact me here- email@example.com or via phone – 0408 233 265.