Solid terms and conditions for invoices are vital for small business. If the invoice is difficult to read or complicated to understand, then it may cause serious cash flow damage. This is because if the client is not able to understand your invoice, then the will not pay. The client wants to be sure that the proper amount of services or goods they have requested is being priced.
Explain services/products provided
This is considered the most relevant part of the terms and conditions of an invoice. This is because it describes what the client is paying for particularly. For instance, if you are contracted to create an internet site for your client, then you need to have a description of expenses and time it cost to get the job done. This answers any doubts or questions that relate to the final sum of your invoice.
Think about legal scenarios and problems
The first thing you have to do before you write down terms and conditions for your invoice is listing all probable legal circumstances and obstacles which can happen. Outline the measures necessary if the customer fails to pay and what happens when you are past the due date for delivery of the products and services to your customer. Also get to know if there are any incentives if clients pay beforehand. It can take you quite time to formulate and think of t the list, but when you have it you can write down the terms and conditions of your invoice
Provide crucial parts
Featuring the vital elements of an invoice will speed up your payment process and also answer any questions your client may be having with regards services and goods you provide them. Logo, invoice number, due dates, client’s contact information, products and services provided and the acceptable forms of payment have to be included on your invoice.
Highlight warranties and guarantees
It is usual for businesses selling services and goods to give warranties. This makes them look reputable and legit and also gives their customers assurance. If you provide warranty and guarantee, ensure it is outlined clearly in the terms and conditions. Do not forget to address issues such as when the customer loses their warranty or guarantee.
Shorten terms of payment
This is rather obvious, but if you give a customer a lot of time for making the payment, then it will take longer to get paid and this, in turn, may lead to slow cash flow. For example, if you give a client 45 days to pay the invoice then the client delay by a few weeks, it implies the payment will have waited for two months. Payment terms of 30 days or less are standard as far as invoicing is concerned to help with cash flows.