As a business owner, there are few things more frustrating than having outstanding payments from clients. Not only does it affect your cash flow, but it also takes away from time that could be spent on growing your business. That`s why having an outstanding payment agreement in place is crucial for any business.
An outstanding payment agreement is a legally binding contract between you and your client that outlines the terms of payment for services rendered. This agreement will typically include the amount owed, the due date, and any interest or fees that may be incurred for late payments.
So, why do you need an outstanding payment agreement? For starters, it ensures that both parties are on the same page when it comes to payment expectations. It also provides you with a legal document that can be used in the event that a client fails to make payment on time.
When drafting an outstanding payment agreement, it`s important to be clear and concise. Make sure that all terms are clearly defined and that there is no room for interpretation. This will help to avoid any confusion or disputes down the line.
In addition to outlining the terms of payment, your outstanding payment agreement should also include a timeline for follow-up. This could include reminders leading up to the due date, as well as a plan of action in the event that payment is not received on time.
If you`re working with a new client, it`s important to have the outstanding payment agreement in place before any work begins. This will help to establish trust and ensure that payment is made promptly.
While no one wants to think about the possibility of a client failing to make payment on time, having an outstanding payment agreement in place will give you peace of mind and protect your business. Don`t wait until it`s too late – make sure to have an outstanding payment agreement in place for every client.