One of the most important, yet often overlooked, aspects of any business that extends credit to its customers are the written terms and conditions that define the credit relationship. These terms and conditions give you the opportunity to spell out exactly how you expect the customer or client to work with you, and can provide a road map for how to handle any situation where they do not.
Despite the importance of having specific written terms and conditions, many companies simply view these details as “necessary legalese” and may even resort to using a stock terms and conditions template they find on the Internet. Let’s take a closer look at why you are better off writing your own specific terms and conditions, what you should include in that document, and how to make sure you are getting the most out of it.
Why You Should Write Your Own Terms and Conditions
While using a cookie cutter list of terms and conditions might save you some time in the beginning, they can also leave you exposed to some serious liability on the back end. No two businesses are alike, and writing your own terms and conditions gives you the ability to specify what makes your business unique and what you expect from your customers or clients.
When writing your terms and conditions, you will have the opportunity to clearly define the rules for how any credit relationship with a customer or client will operate. You will also be able to take your time and be as specific as you like about every detail concerning how you want to relationship to work.
Writing your own terms and conditions will also give you the ability to define a roadmap for how you will proceed with legal action should the customer or client violate the terms of the agreement as you define them. This will put all of the power of the law on your side, should you end up in court over a credit dispute.
What Your Terms and Conditions Should Include
Starting from scratch when writing your terms and conditions can be a daunting task. The easiest way to get the ball rolling is to start right from the top by defining exactly what products or services you offer, who your customers or clients are, and the specifics regarding any credit you might be offering. You will also want to specify the exact payment terms and late payment deadlines.
In addition to defining the basic relationship, you will also want to clearly address any guarantees or warranties you might have in place and how they could potentially impact the credit relationship. You should also stipulate any relevant timelines that you need to deliver products by.
The most important part will be the section where you explain what will happen if the customer or client violates the terms and conditions. Here, you are going to want to explain, in detail, every step you intend to take to enforce your terms and conditions and how you intend to deal with bad debt collection. You should also explain how any possible legal proceedings might work.
Tips for Writing Better Terms and Conditions
Whether you are editing your existing terms and conditions or starting from scratch, it is important to remember to use the most customer-friendly language possible. You should also take some time to imagine the worst possible scenarios involving your most unfriendly customers. This will ensure that you establish a set of written terms and conditions that will hold up under the worst-case scenario.
Writing your own terms and conditions is probably not your idea of a relaxing way to spend a weekend. However, should you ever find yourself in one of the worst case scenarios that you imagine over the course of writing them, you sure will be glad that you took the time to put the best possible terms and conditions into place.