Receiving payments from your customers without any delays are very crucial to any business. Delays lead to tensions and strain the company’s progress. It is, therefore, very essential that the terms and conditions of payment have to be discussed, in detail, with your clients beforehand. Without finalising the terms and conditions of payment, there cannot be any business. The terms and conditions set should be mutually agreeable to you and your clients.

Q. Are your clients not honouring their commitments within the promised time?
Q. Do you know how to write the terms and conditions of payment?

Here are some tips from Kuza Biashara, on how to set the terms of payment:

Time Frame

The time frame for the payment has to be mutually discussed beforehand. Talk to your customers and find out the time-frame they require to make the payment.

Q. What are their expectations of the time limit?

If it is a big amount, you could consider a time-frame of three weeks or six weeks. Do not force a time frame without considering your clients. Give them sufficient time to make the payment without any fines. In case of heavy amounts, you could also think or consider payments in instalments.

Fines or Penalties

You should clearly explain to your customers the fines and penalties they will have to pay, in case of belated payments, before they sign the deal. These terms should be discussed well before before the purchase is done. This will help the customers decide if they can or cannot buy your products or services.

Mode of Payment

Discuss the mode of payment with your customers. Discuss on these conditions before hand and decide if it is in the form of cash, cheques, or credit card? Weigh the the advantages and disadvantages of each option available and then finalise the one that suits you best.

Advance Payment

If it is a new customer, you will have to take the entire payment in advance. In other cases, take at least a small amount of payment in advance once the deal is signed or purchase has been made. Make it a habit, to issue a receipt. Provide a receipt to the customer and retain a copy with the company for reference and proof.

Delivery of Products

Do not deliver your products to your clients before the payment is made. You could effect delivery of the goods in the ratio of the payment. Make it a point to deliver the balance goods only after the complete payment has been made. This will beneficial to both the customers and the company.

Entrepreneurial Learning

Receiving payments from your customers without any delays are very crucial to any business. Delays lead to tensions and strain the company’s progress. It is, therefore, very essential that the terms and conditions of payment have to be discussed, in detail, with your clients beforehand. Without finalising the terms and conditions of payment, there cannot be any business.

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