01: Introduction

Many potential disputes can by avoided by being as transparent as possible with your payment terms. The best way to do this is to agree terms with your customers at the start of any business relationship.

Credit terms are for you to decide, and they may depend on the creditworthiness of the company you are doing business with. So internal controls need to be in place to assess credit risk at outset, and you should set payment terms accordingly.

While the law deters customers from making late payments, if terms are inadequate it makes it more difficult to pursue bad debts later on.