Are your Terms of Business undermining your collections?
Out of date or unclear Terms of Business can undermine your entire credit control procedures and cost you money! For instance, do your terms properly reflect recent Late Payment legislative changes? Your credit control staff deserve all the help they can get to reduce debtor days and leaving loopholes in your business terms will risk letting debtors off the hook!
Lovetts find that many terms of business simply do not maximise cash collections, protect the core business interests or minimise legal costs.
Typical clauses we recommend for review include:
Recover your costs of collection!
A properly worded term might enable you to:
- Recover your own administration costs
- Recover the costs of pre-Legal steps such as a Letter Before Action
- Recover all your Legal costs in a Small Claims Track case
- Recover higher than usual costs in Fast Track and Multi Track cases
Bring forward a due date!
You can insert a term that:
- provides for all credit periods to be cancelled when any invoice is overdue and
- entitles you to claim for work that has not been completed and invoiced
Interest on overdue debts
There is proven and effective legislation to recovery interest and compensation available, so why not use it? Insert a clause to utilise the Late Payment of Commercial Debts (Interest) Act 1998.
Maximise your local jurisdiction!
Two clauses are helpful where you have customers outside England and Wales:
- a clause providing that English law shall be the law of the contract
- a clause giving the English courts jurisdiction over any disputes
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