Let’s face it, none of us read the terms and conditions for the goods and services we buy. In fact, the Telegraph suggests that it would take most of us fifty years to read them all.
So, does that mean you don’t have to read the Ts & Cs in the contracts you issue, either? Absolutely not. And, more to the point, it’s essential to apply them.
What Are Your Terms & Conditions For?
Your Ts & Cs don’t have to be endless and incomprehensible. In fact, recent government regulations specify that they should be as easily understood as possible — but they’re still essential. So why do you need them?
What they’re essentially laying out is your expectations of how interactions between you and your customers or clients should work. For example, they’ll specify at what stage you expect to be paid, and what the implications will be if payment is late. They’ll also make it clear under what circumstances you’ll offer a refund or replacement — and under what circumstances you won’t.
Applying Your Terms & Conditions
You’ve probably worked hard to put your Ts & Cs in place. Maybe you’ve spent money having them drawn up by an expert. So why would you throw all that work and money away?
Unfortunately, a surprising proportion of small business owners do just that. The Ts & Cs are there because they’re a requirement, but then the owner will be too busy to look at them again, let alone remember what they say. Whether or not the customer has read them, they never get applied.
Why Applying Terms & Conditions Is Important
Ideally, all business transactions should be based on trust and respect, but that’s difficult if it isn’t clear what’s expected on both sides. Whether you’re not providing the service you’ve promised or whether you’re allowing the customer to get away with failing in their obligations, there can be no trust and no respect.
Whatever payment terms you set, if your customers learn that there are no consequences to paying late, they’ll continue to do so. This will seriously hit your cashflow, perhaps meaning that you can’t make payments on time — and your creditors may not be as lax.
Of course, there are going to be exceptions. If your best customer pays a day late because of a family tragedy, for instance, you may well choose not to apply the late payment rules. But a one-off choice is very different from not being bothered.
If you need help applying your Ts & Cs, especially around late payment, you’re very welcome to get in touch with me for a chat.