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Invoice payment terms template for Supervision

have you ever wondered what are payment terms why are they important for my bookkeeping business and what difference would they make I will be answering this so you must stay tuned for this video I am Olivia and I'm an accountant and the owner of profits and books accounting and bookkeeping services thank you so much for watching payment terms can make all the difference to your business to your peace of mind to your Financial cash flow and most of all to your relationship with your client so why is it important just think about this and many of us when we started out with our businesses without payment terms we have been in this situation where you've poured your heart and soul into organizing the books of your clients you did everything to the tea you dot the eyes you cross the tees and then you don't don't get paid you yeah I will pay you later I'm waiting for payment for my client and then you don't hear anything so payment terms will help you to navigate the landscape of payments so what are payment terms first of all it is exactly what it says it set the terms on how you how and when you expect to get paid this only comes with confidence and only after you've been bitten badly maybe once or twice or maybe more than once or twice by just trusting a client blind blindly and not setting terms and conditions so your payment terms must have the net 30 days net 60 days net 90 days or payment due on what is it um payment due you on receipt so that means this is the amount of days your client has to pay the invoice it must be clear and it must be preferably marked in bold when you take on a new client take a deposit do not work with hope do not work with maybe put down a demand insist on a depos depos it before work can start and this must be set out clearly in your payment terms you must State clearly work will only start once I have received x% deposit it can be 20 50 60 25% depending on what you feel comfortable with and depending on what you feel is enough to cover your expenses to pay for your time because you don't know yet whether this is is a good or a bad client so at least demand insist on a deposit then next up monthly retainers when you have because you know as you get to know your clients you also get to understand then what are the services that they need from you so then you can offer them a package where after getting the deposit you can then say for x amount every month you will pay me x amount and I will deliver X services to you be very clear on what services you are offering for that monthly retainer if you are fortunate enough to work on a big project don't make the mistake of wanting payment when the whole project is done no no no no no no no that's not going to work as you finish certain parts of the project then you must submit an invoice and you can receive payment say for instance you say this project maybe it runs into 2 million 3 million 5 million or maybe 50,000 60,000 whatever so you say when 20% of the work is done I want 25% of the money when 60% is done I want x amount of the money set that out clearly on your inuring in your payment terms and then also in terms of the payment method make it easy for your clients to pay you because eh I can tell you efts they don't always work so nicely so it's nice when you have um card payments available when you have other online platform um payment uh methods available it just makes it so much easier for you to do and then of course you must have give customers incentives you know have a heart when it's a big client and they have paid you on time without any hassle without any you didn't have to chase them you didn't have to threaten them you didn't have to feel disheartened or despondent because this person is just a late payer or a bad payer give them an incentive give them a discount I'm not saying that you must do this with every client a client must earn a discount that is key then also oh be firm but friendly you don't have to be rude and sway at people and threaten them even though sometimes the urge is there believe me the urge is there to threaten them with death to threaten them with all the vile and ugly things under the sun because they are just refusing to pay your money no be professional at all times be firm but be friendly you can also when you look at a client situation and you can assess but only once they have earned it you can then tailor make a package for your client based on their needs based on their cash flow but that will also satisfy your needs I'm not saying that you must Bend backwards for a client and then at the end of the day when you are done with the job you don't have anything to s or you have to wait an eternity for your money because you have said the wrong payment terms no I am saying look at the situation assess and come up with terms that will satisfy both you and your client then what do you do when someone pays you late you know you have to follow up you have to call you have to make sure that they know that they still owe you this money there's a tendency not to sound like the hateful politicians in this country but there's a tendency of many business owners of not paying you and then they just act as if you don't exist as if you they don't owe you anything you've just vanished off the face of the Earth and with the same your invoice also have vanished has vanished from the face of the Earth you need to grow a set of balls because you need to pick up a phone and call a client and say excuse me this invoice is still outstanding when can I receive when can I expect payment and also make sure that in the contract in your payment terms there is a penalty for late fees some just to get the money without the penalty it's a huge bonus but very often the penalty is a deterrent for a late fee and remember the payment terms it might be difficult it might feel weird and uncomfortable at first when you get your client to say I expect my money the 30th I um there's a penalty for late payments it might feel a bit uncomfortable but you have to get used to that feeling otherwise you will be working for air wind and sand the moment some clients they sniff that you are uncomfortable to pick up a phone and demand your money then they will walk all over you and then also think about how are you going to reward your clients that have been paying you well paid you on time communicated every time how do you reward them because it's not always possible to give them a discount especially when you are starting out you are going to need every send but as your client base as your client base grows and as your income grows you need to think of voice of how to incentivize your clients an important note I want to end off with when you set the payment terms before you send the invoice send them a reminder that payment will be due maybe the last day of the month or the 25th of the month then from the 20th of the month you send them a reminder to say payment is due you can expect my invoice on the 25th on the 25th again you send the invoice make make sure that you send an invoice the same time every month it's not always possible because you are also running a business and sometimes things get crazy then automate your invoices that is where the accounting software comes in automate your invoices send reminders to people and then follow up this is part of running a business but once you've set the payment terms you will see that your business will begin to flow you will also it will you will also begin to gain courage to when someone is paying you late or look some people you will just have to accept they are not going to pay you and it's not worth the effort to chase them accept that but you must not Let It Go without a fight a fight where you are professional but you are firm and you are friendly as well and even when they are rude because some people are just unpleasant they rude they are unprofessional they have no manners and they are disrespectful it's in their nature to swear and to be rude instead of talking if they do that you don't go you don't lower yourself to their level you stay professional let them rant and Rave and you say to them you still have not answered my question you have not explained to me when I am getting payment so it's not an easy road but it's all part of of of running a business if you have enjoyed this video and you would like to get more comment or and you would like to see more videos like that like this please like share comment and subscribe I would love to hear from you and to let me know what you think what your struggles are and what you are battling with but also I would like to hear what your success story in your business is thank you so so much for watching