Essential Terms and Conditions on Invoice Sample for Product Quality

Terms and conditions on invoice sample for Product quality

[Music] [Applause] [Music] hi there this is Alan Archer I'm the director of supply chain for Houston healthcare down in Warner Robins Georgia here to give you part two of a little mini series that we're doing on contracting last time we talked about what it takes to really set up a contracting process this time I'm going to give you five terms and conditions that you really need to look at and really talk with your attorney about what that works best for your organization so that you can go out and write the contracts you need so that your clinicians have the products they need to take care of your patient so really the first thing we're going to talk about is the contract term this is really simple this is how long is the agreement or commitment to the supplier what you want to make sure with this is that that term is defined I want to make sure that we know is it for 12 months 24 months is it five years is it seven years but really make sure that you know what it is going into the agreement so that you don't get stuck in something long term and that really ties your hands from doing what you need to do one thing that as you're talking about terms you want to make sure that you watch out for those automatic renewals they might put language in that says this Agreement shall be renewed for successive terms unless terminated by either party so that really kind of gives an open-ended statement and that may work for your organization it may not just want to make sure again you consult with your attorney and determine what works best and then go forth and write that contract the second thing if we're talking about Eternals talk about termination how do we get out of the contract do we have the ability to terminate that contract for calls do we have the ability to terminate that contract for convenience just make sure that you're writing these though that you understand while we would like to have the ability to get out of that contract at any time if we need to make sure you understand that the supplier also has the rights sometimes to terminate that agreement upon 60 days notice and they may come in and say you know what we're going to terminate this agreement because we need to raise your prices so as you write those agreement make sure that they're they're fair but make sure that you understand that they can get out of an agreement as well you always always always want to have a termination for calls in there so that someone breaks the contract if they fail to send you what they you ordered or they fail to perform in a way that helps meet your needs that you have the ability to get out of that contract usually allows them a time period to cure that breach but you want to make sure that you have the ability to get out if they don't do what they're supposed to do what we call that usually is failure to perform that language protects you should the supplier be unable to provide those products or unable to provide that service for your equipment if you're talking about a service agreement and it really it's important because we as providers must rely on the availability of our product and also the pricing of our products to make sure that we can do what we do we need to make sure that those suppliers give you some kind of financial guarantee of their obligation and understand that moving away from a supplier is challenging it takes time it takes money you want to make sure that when you write those contracts you have the ability to protect yourself as you move forward the next thing we're going to talk about real quick is pricing this is usually why we write contracts is make sure we lock that price in for as long as possible and really the ideal state here is to lock that pricing for the term of the agreement make sure that you say you know what I want this price now and we're gonna give you 24 months commitment we're going to lock that price for the whole way sometimes that doesn't work so they're going to ask you for increases what you want to make sure you do is that you lock those increases into maybe one a year and you want to make sure that those contracts are either the lesser of rising consumer product index or three percent or whichever is less one quick tip to give you some protection beware of any pricing that says that this is a discount off of list discounts off of lists can get you in trouble because that supplier may change that price book or that price list every six months and so while you think you've got a standard price for the length of the term you may end up with only a price that's good for however long it is between they're changing their price books so what you wanna make sure that your price list should include both the list price and the net contract price that you're gonna pay and you want to lock that net contract price that'll keep you protected through the term as we're talking about money let's talk about invoicing and payment terms make sure that you understand whether it's a net 30 or a net 15 some of our distributors like to have those net 15 so they keep cash moving make sure before you agree to any invoicing terms that your financial staff can handle those kind of turnarounds don't agree to a net 5 when everybody's ap needs at least 15 days to turn an invoice around so make sure that you don't get yourself in trouble by just skipping over the invoice section another quick tip for you is to make sure that those invoices have the information that you need on them and this is really specific for like those physician preference items those implants or those bill only make sure that that invoice includes the patient name or at least the the account number for the patient make sure it has the physician information on it so that you can go back and track that at a later date talking about another category if you're looking at your copier lease invoices you want to make sure that invoice tells you the serial number of the unit that it's covering also a location if you can and then service or lease dates so that you know just how long your contract for that particular piece of equipment is valid for make sure that you don't accept any language that places limits on the suppliers liability or imposes excessive late fees for late payments those are just some things that will keep you out of trouble finally the last term and I want to talk about is confidentiality we're seeing this more and more as suppliers per language in that says that the terms of this agreement cannot be shared with anyone outside of your organization now on the surface that's a very fair and valuable request but understand that that language can preclude you from doing things like sharing that information with your non employed physicians sharing that information with consultants that come in to help you run your business it limits your ability to use benchmarking services or even in some cases we've had suppliers who have limited our ability to share our spend data with our group purchasing organizations and that hurts us because we have no way of tracking our fees and our rebates or our spend and so you want to make sure like in all things that your confidentiality language allows you to do what you need to do with the data that you own and so understand that the way contracts are written can really get you in trouble can lead you to lawsuits on this particular Institute at this particular term more than anything else because the suppliers want to protect that pricing they want to protect their data and you need to make sure that you can do what you need to do so again just to wrap up want to make sure that you work with your council make sure whether they're internal or external to determine what works best for your organization you then need to define those terms and conditions and then work to standardize them into your contracts whenever possible ultimately make sure that any document that you do is written in a way that lets you do what you need to do to manage your business remember that a solid contracting process with predefined terms and checklist allow you to write those agreements that will protect your organizations while still allowing you to provide the services and products you need so that your caregivers can take care of their communities thank you and again it's been a great day and please feel free to reach out and look for more podcast from arm thank you [Music]