Understand the Legal Parameters Each country has a separate standard for credit terms and you will want to familiarise yourself with those laws as you are setting up your small business terms and conditions. What are the legal requirements for customer returns or customer complaints? What are the customer’s rights and privacy laws in your country for small businesses? What disclaimers must your business post to do business with customers?
Establish Procedures Establish systems and procedures within your small business and across departments to ensure a consistent business approach as it relates to terms and conditions. Consider what your current process is and what the gaps are when establishing procedures and practices in your small business. Define and set up a customer credit policy and communicate it to other team members to ensure a consistent work flow. Develop an application form and consider making it available on your company website for new customers to fill out when they are requesting credit from your business.
Establish a Credit Policy for Your Business Establish a credit policy for your business which will include the circumstances that you will offer credit, the process to determine a customer’s credit and the terms and conditions that your small business is offering. Select and establish a collections policy for any customer that does not pay or is slow and communicate this process to all employees who would be involved to ensure consistency.
Create a Credit Term Discount Consider creating a term discount for credit customers such as a 2% net 10 policy to encourage customers to pay their invoices early.
Establishing terms and conditions for your business will help to improve work flow and can enable larger customers who only work on credit to establish a relationship with your business. I encourage you to post a comment about your ideas or practices as it relates to effective terms and conditions that have been effective for your small business. Also, if you are not already a subscriber to my website, enrol to day so that you can continue to receive valuable small business tips such as this.
How to Set up Effective Terms and Conditions Before you Sell on Credit - To learn more about this author, visit Mark Gwilliam's Website.
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Mark Gwilliam
(Visit Mark's Website)
Mark Gwilliam, FCCA, uses his
international experience to coach small
business owners on how to run successful
businesses. He combines his natural
enthusiasm for sharing his knowledge with
his proven ability to provide practical
down-to-earth solutions for his clients.
He has written several books and owns
several companies which offer small
business owners integrated business
solutions. He writes several business
articles in his weekly newsletters “The
Bizness” and “Successful Marketing
Strategies”. To read these and to have
access to more tools and resources to
turbo charge your business, visit his
sites at www.thema
rketingdude.com and www.mark-gwi
lliam.com
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