Terms of Trade agreement presented to your client prior to working together ensures your client fully understands your legal right to be paid.
Your Terms of Trade let your client know right from the word go when you are to be paid: on receipt of invoice, within seven days of receipt of invoice or on the 20th of the month following (whichever is outlined in the Terms of Trade document). It establishes your expectations and shows you are running a professional business. If a payment is late or missed, the focus can be more courteous and less personal – more on what was agreed rather than on your impatience with the client for their late payment.
Terms of Trade are NOT enforceable if they are only noted on your invoice. Is this you?
Call us now to ensure you are protected - 07 834 9111
Well-worded Terms of Trade ensure your client understands they are legally liable, not only for what is owed to you for the goods or services provided but also for interest, late-payment penalties, collection costs, solicitors fees, court costs and so on.
When you have provided Terms of Trade that clearly state your client’s liability, it is more likely that you will be able to recover costs when you seek CollectIT’s help with pursuing the debt.
In the case of a limited liability company, a signed personal guarantee as part of your Terms of Trade provide you with another avenue for recovery.
What if you decide not to bother?
If you do not provide Terms of Trade prior to working for your client, you are reducing the chances of successfully recovering money owing to you, if your client decides not to pay.
What do you do now?
Call 07 834 9111 right away.
The longer you wait to chase up the money that is owing to you, the less likely it is that you will be fully repaid. If anyone owes you money, email our office now with your contact details, and we’ll call you back to work out how CollectIT can help remove your unwanted business liability - unpaid bills.
Debt collection protects a business when there are agreed Terms of Trade.
A Wellington property developer owed a roofing contractor $14,500 for work carried out by the roofing contractor’s business. After many attempts to get payment from the developer, the frustrated roofing contractor asked CollectIT to collect the debt.
Fortunately, the roofing contractor had a signed agreement with the developer which included Terms of Trade. Because of the agreement, interest and collection costs could be added to the debt. Only eight days after CollectIT became involved, the developer paid $13,000. He refused to pay the balance, raising issues with three of the invoices. He also refused to pay the interest and the debt collection costs.
The roofing contractor’s signed agreement with the developer entitled him to charge interest and collection costs. The roofing contractor sorted the issues affecting the remaining invoices. CollectIT then arranged for the developer to be served a statutory demand for the outstanding amount.
Once the statutory demand was served, the debtor realised that their company could be put into liquidation and so paid the outstanding amount. CollectIT’s client was ecstatic to get his money, especially as it cost him nothing. The happy roofing contractor still recommends the CollectIT team to others.
Eighteen months after this successful collection, the developer was made bankrupt. He owed $5.6 million to a finance company. If our client had not asked CollectIT to chase this overdue money, there is a high chance he would still have been owed.
Download "Credit Terms" sign to put in your reception area