Avoiding Bad Debts
Croner’s commercial legal helpline advisors give their tips on getting invoices paid in the current climate. Bad debts are a great concern for many businesses, so what preventative measures can an organisation take to reduce the risks?
Dealing with the paperwork
Make sure that you keep on top of all your
paperwork at all stages of the transaction. To
start with, have professionally drafted terms and
conditions of business. It is better to have a signed
contract setting out the terms than to print your
terms on the back of an invoice. If the terms were
not brought to the customer’s attention before
entering into the contract, they may not be
enforceable. You can set out provisions for credit
periods, and claim interest on late payments.
Ensure that you know who the contract is with,
whether it is the individual or a limited company.