Contracts – best practice, what you should be doing.
Why do I need a contract?
If you haven’t got a written agreement between you and the customer there are no rules. It’s as simple as that.
Peace of mind because if you haven’t got a contract in place, stating clear terms and conditions at the beginning, you’re leaving your business wide open to misunderstanding which in the end is going to lead to cash flow problems.
A written contract is an agreement between you and the customer which clearly sets out who’s doing what, by when and how payment will be made.
It doesn’t need to be page after page of legal jargon either. Write everything in plain English so that can be easily understood by all parties.
Your contract must be put in place and agreed you begin any work. In this way you address everything at the start and avoid any disagreements later. Include specific terms and conditions in your contract and because every piece of work you do may be different, tailor your terms and conditions for every new project, client or service. Never be tempted to copy and paste somebody elses.
What should I put in terms and conditions?
- The names of the people or businesses involved in the work.
- The products or services you will provide
- Geographical boundaries
- What you are responsible for
- What the client is responsible for
- A timeline for delivery
- A breakdown of fees and expenses
- How you will charge for materials you have to buy
- Who is liable if a service is not delivered, or a deadline
- When payment is due
- What happens if payment is late
- The country law which covers this contract
Because every business is different and operates in different ways, there will be clauses you’ll need to include that are unique to you and your business which is why you need specific terms in place.
What if my client cancels?
That’s why it’s so important to have a contract in place before you start. Think about the effect on your cashflow if a client cancels Think about the time and money you’ve already spent and how you will deal with it. Likewise, if you need to cancel for any reason, you’ll know exactly what you’re liable for and be able to plan for it.
A clear cancellation clause in your contract means peace of mind. Should the worst happen and the client cancels or pulls out halfway through the project, you’ve got the written proof of what you agreed.
Is my contract legally binding?
In court. But if there’s nothing in writing, no agreement, no contract, there’s no proof. Should the worst happen where you need to take someone to court for non-payment, your contract gives you all the evidence you need.
A digital signature is acceptable and one of the best ways to do this is with Signable because once you sign the form electronically, no edits may be made.
I need a contract but don’t know where to start
One of the most useful things to do to get started is to put a list together of all the worst things that could happen. However daft it may seem, just write it down. Then think about the things your client needs to know and write those down. After that, break down all the costs involved and decide when you need payment.
When you’ve got all those, why not give me a call and we’ll talk it through together. I’ve helped many businesses get the right contracts in place, with clear and specific terms and conditions, tailored to their needs.
Need peace of mind? Call me today.
I help businesses get paid quicker. Simple as that. I’ve turned a long career in credit control into a service designed to improve your bottom line. My clients know me as the Contracts Lady and the Cash Flow Queen.