Terms & Conditions help with financing – and business in general

Flexible invoice discounting means you can get access to the money you are owed immediately, but it doesn’t mean that you should let customers walk all over you. Every Australian business has a right to be paid within a reasonable timeframe, and should make that clear in a key document that every business should have: its Terms & Conditions.

The good news is that it’s not difficult or expensive to produce a really good T&Cs document that will serve you time and again. And T&Cs aren’t just good for cash flow and business financing – they will serve you well for customer relations, avoiding legal disputes, and winning new clients.

What have T&Cs ever done for us?

A clear set of T&Cs will go a long way towards avoiding legal problems. Mismatched expectations between a supplier and client are a leading cause of disputes, and many of these could be avoided if terms of business had been clearly set out at an early stage. By making clear what you are supplying, when, and how, your client will know what to expect.

A professionally-drafted T&Cs document will also help put a limit on your liabilities: By sitting back and putting careful thought into all the potential disputes and ramifications your business might face – with the help of a good lawyer – you will be able to draft suitable disclaimers. And if you are sued or have to take a client to court, things should be a lot clearer, simpler and cheaper.

T&Cs aren’t just about legal protection, though. By including rights for your customers in your T&C document, you offer a guarantee: this is a great way to reassure potential new clients who, after all, have to trust you to deliver an important product or service in their supply chain.

OK, but apart from clarity, legal protection, and customer trust, what have T&Cs ever done for us?

As if all that weren’t enough reason to go out and get a good set of T&Cs drafted, this magic document will also help you get paid on time. Presented at an early stage, your T&Cs will set out when payment is due, and even stipulate extra charges for late payment. These clauses need not come across as unfriendly – they are a useful timetable which help all businesses with their cashflow management.

T&Cs may also be useful if you ever wanted to raise cashflow financing, such as invoice financing or factoring. These forms of business finance, also known as debtor finance, can be a great way of managing your business’ finances and raising funds for operations and investment – and can be much cheaper and less risky than unsecured business loans, or secured business debt from a bank.

Whichever form of financing you choose, a good set of T&Cs will be something the lender or invoice discounting company wants to see. It will also help you have a good history of being paid on time.

You only have to get your T&Cs drafted once – and you can use them again and again, for every transaction. It’s not only the most important document a business can have – it’s probably the best value too!

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