Your terms of service should be at the top of your priority list – they are a draft of the bones of your business because they impact on your cash flow and profitability. For instance, it is common place for companies to put invoices from SMEs to a side, assuming that they won’t impact at all on the company’s cash flow or the director’s daily needs, if invoices are paid as and when it suits the client. If you are not affected by the timing of invoice payments, then you can be flexible in your terms of service and offer 30, 60 or 90 days from the invoice date until payment is made. But if this impacts on your daily expenditure, then 7 to 14 days, plus penalties for late payment would be something to consider, when you discuss with your solicitor what to include in your terms of service. Remember also that the minimum legal requirement for invoice content is yours or your business name and address; but you should also include in your invoices the date by which they should be paid, because if you don’t, your clients are by law allowed to pay your services as and when it suits them.
Your terms of service should address all aspects of the business in relation to your client right on the outset of the relationship. Everything that involves your client should be in this document that will be used in the court of law should any issues arise. Also, this is the document that you produce when in dispute with your client and even just as a reminder of your business terms for you and for your client. Remember though, each client might need amendments made to the terms of service.
Of course, what goes on the terms of service depends on your business, its size, what kind of relationship you want to have with your clients and what you want to protect. For instance, a pet care company might want to add to the terms of service a clause that sets out what will happen should the client’s dog bite someone or cause damage to property. An office ad-hoc administrator might want to include in the terms of service any fees chargeable in the event of last minute cancellation of services. It’s up to you and your solicitor to discuss what goes on your business terms of service and it is entirely up to you to make it clear what your business is and what direction you want it to go, as well as what kind of relationship you want to have with your clients. In any case, your solicitor will help you see every aspect of your business more clearly and will advise you on the best way to protect your business.
You must have a concise definition of services your business provides, when will the relationship start and with whom, what the fees are, what penalties may be incurred and on which events, what the payment terms are, when the relationship will end or if the date isn’t known, how the relationship should end. All in all, the terms of service protects the business and your definition of services are brief but comprehensive. So think about the bare bones of your business, right down a list of everything you can think of that might affect your relationship with your clients as well as your cash flow, then present it to your solicitor prior to your first consultation.
If you would like to have a free first consultation with a solicitor, please give us a call and we can set up a time to discuss that first draft of your terms of service. By Sandra Garcao
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