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Ledger Guard's Tips & Strategies - July 2011 |
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"Protecting Your Business" |
Tips & Strategies - July 2011
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How Terms of Trade Help Ensure You Get Paid Every Time
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Hi
When you do business with clients, the very best thing you can do to set a professional standard is to demonstrate that you are easy to deal with but that you are also fair and expect fairness in return. Expecting clients to instinctively understand the rules of dealing with you will result in difficulties and possibly a breakdown in the relationship.
Clients are not experts at what you do; you are. They may not be aware of how the smallest changes to the overall job can cause major blowouts in costs and time. It's inevitable then that resentment can arise and a client who engaged you because they love your work can become your most disloyal ex-client.
You can protect against this happening by providing them with a detailed quote and comprehensive terms and conditions. Spelling out the conditions of working with you can even create raving advocates of your goods and services. This month we focus on your most important document - Terms of Trade.
We also introduce our client Property Wealth Pty Ltd to savvy readers who want to maximise the returns on their investment property. Scroll down for more information.
Regards
Larry, Geraldine, Mike, Emma and Ben
How Terms of Trade Help Ensure You Get Paid Every Time
Manage your debtors
Before you sell goods or services to any customer, it’s important that you provide them with a copy of your terms and conditions. This is a legal document most commonly referred to as Terms of Trade, but also known as Terms of Supply, Terms of Sale, Terms of Engagement and Terms of Hire. Every business should have Terms of Trade in place before dealing with any and all customers. It protects your business and gives you legal recourse should anything untoward occur.
Once you have your Terms of Trade document created, it should be provided to every customer before any initial transaction is conducted. It should be used for new, unknown contacts as well as old and trusted friends. Verbal agreements can complicate matters when misunderstandings occur and can also lead to your reputation being tarnished. Written legal agreements remove any elements of doubt by spelling out what is expected of each party.
Terms of Trade provide a foundation for negotiating and resolving any disputes and give you the ability to enforce your contractual rights. They also show your customers that you intend to operate fairly and with all terms spelled out before work is undertaken or goods are provided.
In the event that a transaction between your business and your customer goes sour, your Terms of Trade document can give you the right to claim interest on overdue accounts and recover any costs of using a third party to collect the debt.
Terms of Trade should always be:
- Seen as an investment in the success and longevity of your business.
- Written by a professional experienced in the preparation of these documents.
- Written so that they are legal, fair and straightforward.
- Written with the goals of clarity, simplicity and readability in mind.
- Practical and easy to implement.
- Provided to all customers before conducting any initial transaction.
- Signed by your customer and returned to you before commencing work or providing goods. Otherwise they will not be enforceable in the event of a dispute.
- Reviewed at regular intervals to ensure they continue to serve your business's needs.
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Terms of Trade - The Top 5 Benefits
- They create a solid foundation upon which to base single and ongoing transactions.
- They help to keep your cash flow positive.
- They eliminate the potential for disputes to arise.
- They demonstrate your business’s professionalism.
- They give you peace of mind knowing you and your clients’ legal obligations are spelled out.
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Are Clients Taking Advantage of You?
We can help
Many businesses report souring of client relations due to ‘scope creep’ (see definition at right). Ledger Guard can help you avoid this situation by creating your Terms of Trade document. Once your business begins using them, you will enjoy peace of mind knowing that all expectations are addressed before work commences. A new quotation or a variation can be raised for any changes to the original scope.
We specialise in:
* terms & conditions that will protect your business.
* processes for managing trade credit.
* credit reports to find out if you are likely to get paid.
* processing credit applications to ensure the information adds up.
* outsourced credit control to follow up slow payers.
* debt collection for late payers who ignore requests for payment.
For more information:
Ledger Guard's website
Ledger Guard's
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Ledger Guard's Phone: 07 3260 7232
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In This Issue
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How Terms of Trade Help Ensure You Get Paid Every Time
Manage your debtors
Terms of Trade
The Top 5 Benefits
Are Clients Taking Advantage of You?
We can help
What is Scope Creep?
See below
Introducing Our Client
Property Wealth Pty Ltd
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What is Scope Creep?
When terms and conditions are not spelled out, ‘scope creep’ can occur. This refers to uncontrolled changes in a project’s scope and can lead to unrealistic expectations on the client’s part.
Usually what happens is a client will expect or demand that additions over and above the initial agreement be ‘thrown in’. It is mostly due to lack of client understanding of what can reasonably be absorbed into a project’s costings.
Scope creep is common in many industries including web design, graphic design, architecture, construction, accountancy.
Businesses can sometimes feel as though they have to meet the client’s expectations or lose the client or their referrals. So they give in and comply which leads to resentment and sometimes, cutting corners on the original brief in order to not lose money on the overall job.
The best way to avoid scope creep is to implement Terms of Trade.
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"Ledger Guard's documentation services are an absolute must for any business wanting to limit their exposure to non paying debtors. By utilising their well written terms and conditions of engagement, I feel a lot more confident in the administrative and structural process of taking on jobs and new clients."
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"We would recommend Ledger Guard to any business that needs debt collection or an update of their credit documentation."
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Introducing Our Client:
Property Wealth Pty Ltd
Property Wealth Pty Ltd has a team of qualified quantity surveyors who undertake plant and equipment evaluations and prepare Tax Depreciation Schedules for property investors.
Their Tax Depreciation Schedules are comprehensive, easy to read and fully compliant with income tax legislation.
So, if you want to maximise the returns on your investment property, give Paul Palella and his team a call now on 1300 737 042 or check out their website for testimonials and additional information.
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