Decide what a reasonable amount of time is for your customers to make payment. Most companies will choose either 30 days from invoice date or the end of the following month, but some may go with as few as 7 days or as many as 60 days.
Decide how your customers can pay you, BACS is usually the preferred method these days, but most companies still accept cheques, and Paypal is increasing in popularity too.
Most importantly you need to add your payment terms and accepted payment method to your invoice template so they are sent to your customer every time you send an invoice. You need to make it as easy as possible for your customer to make payment, because if your customer has to go hunting for your payment details then your invoice will go straight to the bottom of the pile!
Once you have set your terms think about how you will inform your new customer about them. The easiest way to do this is to create a Credit Agreement document. This document will outline your payment terms and accepted methods of payment, it will also contain information about any discounts you will give to your customer, and make statements of fact, such as: All goods will remain the property of [your business] until payment in full has been received.
Your Credit Agreement should also include consequences of late payment, for example, you will exercise your right to charge interest on overdue invoices at the current recommended rate, you will pursue outstanding monies through the courts, if you have to take a customer to court then all future purchases will require payment in advance of goods being sent.
Create space for both parties to sign and date. Easy!
Jamie has spent many years working in administrative roles, she has also spent time as a stay at home mum and now loves the flexibility of working from her home office and being available for her family whenever they need her.