Your business needs to sell goods/services to make money. Just as importantly, you need to get paid in full as soon as possible.

You and your customers should be clear before doing the deal exactly what product/service you are selling and any terms and conditions that apply, including how much the customer must pay you and when.

Get a written contract that can be adapted for most customers drawn up by a solicitor who specialises in this, so the cost will be minimal.

Don’t try to do it yourself unless you are legally trained and experienced in this area.

If your contract is in writing you and your customer each keep a copy, signed by both of you, stating very clearly all the terms of the contract.

Money Saving Reason 1: Clarity

Your customer should be clear about how the goods should perform or what to expect from your service. Your contract should give a full explanation.

Any customer who claims later that your goods/services were not up to scratch cannot ignore these terms.

So by stating clearly what is and is not reasonable you have saved yourself a lot of time. And time is money.

Money Saving Reason 2: Getting Paid

By having a clear contract, spelling out how much is payable and when, the customer should be in no doubt as to your terms of payment.

If the customer refuses to pay for no good reason, you can use your written contract to show what was agreed and take them to court if necessary.

A judge is likely to accept your point of view (other things being equal) if you can back it up with a written contract, so helping you to avoid a bad debt and subsequent loss of income.

Money Saving Reason 3: Unforeseen Events

A well drafted contract should cover you for all sorts of unforeseen events. You might include contract terms about how you both proceed in certain circumstances. For example, if there is a dispute between you, your contract could give details of a body which could mediate between you.

This could minimise any time lost arguing about conflicting points of view if you want your bill paid on time. That could help your cashflow.

Money Saving Reason 4: Protect Your Intellectual Property

Many clients believe they have full ownership of your intellectual property once they have paid for a service. This is not the case.

You can protect people stealing/misusing your intellectual property by having clear details in your contract.

That should save you potentially vast sums of money, depending on the worth of your intellectual property.

Money Saving Reason 5: Certainty

If you don’t have a written contract agreed before work commences, how are you going to enforce the terms later? Without written evidence, it’s your word against your customer’s, and that could prove very expensive for you. If you go to court and the judge can’t see any written evidence of a contract he will have to have to come up with a ruling which could be unfavourable to you.

Going to court is very expensive and time consuming. Start on the right foot by getting a written contract drawn up and agreed before you do business, and maybe you won’t have to sue your customer, thereby saving yourself a fortune in time and money.

Disclaimer – These are general remarks and not intended to be legal advice. Ask a solicitor if you need more help

We specialise in small business tax and accountancy. Call us for more help on 01737 559211. We work with other trusted professionals.

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