Using Contracts to Ensure that You Are Paid

Entrepreneurs are responsible for a variety of tasks. They have to ensure that their customers receive a high quality product or service, but they also need to make sure that they get paid for their products and services. If entrepreneurs go unpaid, then they don’t make a profit.

One way for entrepreneurs to avoid not getting the payment that they are due is by requiring a contract. Any decisions that are made by you or your customers should be put into writing. This day and age, verbal agreements simply don’t mean much. Contracts can not only help to protect the entrepreneur, but they can also help to protect the buyers. It is in both parties’ best interest to complete a contract.

One of the easiest ways to create a contract is by using a template. You can then tweak the template to meet certain business needs. You will want to include pertinent information including the terms of payment, amount of money owed, deadlines for making the payments, and details of the contract. You can discuss your options with a business attorney.

When you want to have a successful business transaction, you will have to have good communication. If you and your clients share as much knowledge as possible, there are fewer issues that may arise down the road. You should do the following:

• Ask for references before you accept new clients
• Determine the terms of the contract before you begin
• Obtain several ways to contact your customers
• Send out invoices as soon as jobs are completed
• Follow up after the invoice has been sent

Sometimes, details may be overlooked. To cut down on this, you will want to consider:

• Billing the job in milestones
• Double checking your math
• Sending electronic invoices that are unable to be edited
• Keeping accurate records of all invoices and bills

In order for a business to be successful, cash flow is very important. For this very reason, it is important to use contracts.