Invoice terms and conditions help needed please

[TheMunk]

I'm a new NICEIC Domestic installer and I'm currently revamping my invoices as I've had a few issues with customers paying late so I'd like to put some T&Cs on my invoices but I wasn't sure what the legislations are on this. I noticed that on a few templates I found online have something along the lines of "Payment is due within X days. Overdue accounts subject to a service charge of X% per day." What I'd like to know is what are reasonable values for X and are there any legislations on this. I was thinking of putting "Payment is due within 14 days. Overdue accounts subject to a service charge of 5% per day."

Also as a sole trader should I put my unique taxpayer reference somewhere on my invoice as I noticed someone mentioned on another thread that tax can be withheld by contractors (sorry I can find the thread I found this info on but it mention the CIS scheme which I'm not part of)

any other recommendations for my invoices would be greatly appreciated as the paperwork side of things is all new to me

thanx
david

 

[Octopus]

You can put what you want on your T's and C's BUT the customer will pay when they want to.

 

[ArseyDee]

You can put what you want on your T's and C's BUT the customer will pay when they want to.

Agreed^^^^.

Domestic customers are pretty good if you tell them how and when you want to be paid (i.e. staged payments or on completion).

Commercial & industrial clients are a different animal. They probably do their payment runs just once per month.

Not convinced that a late payment charge is the way to go!

 

[comptonspark]

Basically if you don't ask you don't get. I use

Thank you for your business, prompt payment within 14 days would be appreciated.

seems to work for my (domestic) customers. If there are any late payers then just chase with a phone call or statement, usually seems to work.
​

 

[ArseyDee]

I use 'upon receipt of invoice' as my stated payment terms.

When you give customers 7, 14, 30 days, etc., it's human nature to take advantage of this. We all like to delay paying our bills when we can! Invariably, payment then becomes overdue and reminders or phone calls are needed. Not a very productive use of time for a small business owner.

Get paid by your domestic customers as soon as you finish the job. This will aid cash-flow while you wait for the companies to 'cough up'.

 

[Octopus]

Most businesses will pay 30 days after month end so you need to allow up to 60 days for payment, and ALWAYS invoice before the end of the month

 

[Paulgwat]

In a previous job i spent an awful lot of time looking at contracts with lawyers and the first thing you have to make sure is that it appears to be fair to both parties and is clearly spelled out to the customer beforehand for it to be worth anything at a later date.

Late payment penalties were fine but had to be in line with reality i.e. you would be unlikely to get away with 5% a day when interest rates are at 0.5% and most business run cost of money at around 1.5 to 2% a month.

How you get customers to agree t's and c's up front etc is something you would have to decide upon, but you would need some way of demonstrating that they were available to the customer to make an informed choice before they engage your services otherwise again they aren't worth the paper they are written on.

We used to approach the problem from the opposite direction and offer a couple of percent reduction on a bill if it was settled within 15days but this tended to be high value business i.e. it made a difference

Another alternative if doing domestic could be to sign up with World Pay or the like and take credit cards - no excuse about not having the cash to pay at the end of the job then!

Cheers

Paul