Through our years of experience in credit management, we have prepared a number of practical tips that can help you improve a number of aspects in your credit management process.
General terms and Conditions
Drawing up good general terms and conditions of sale, delivery and payment is one of the first things that you must arrange. What should at least be included in good general terms and conditions:
- Payment conditions;
- Consequences of non-compliance and claused compensation;
- Warranty, complaints and (limitation) liability;
- Applicable law and choice of forum;
- Delivery provisions;
- Costs for non-payment after invoice expiry date;
- Interest and collection costs;
- Advertising / claim period;
- Retention of title;
- Authority where the conditions are deposited (Chamber of Commerce).
Retention of title
A retention of title is valid provided that:
- Included in the general delivery and payment conditions;
- Made in the language of the debtor’s country;
- Binding if the other party has (demonstrably) taken cognizance of the content of the general terms and conditions before or during the commencement date of the contract (order);
- Please note: in Germany, an extended retention of title must be included in the general terms and conditions of delivery and payment.
Notification and acceptance
Current legislation states that general terms and conditions are voidable if you have not provided the buyer with the general terms and conditions before or at the conclusion of the agreement. It is essential that the general terms and conditions are known to the buyer even before the conclusion of the agreement (at the latest when the order confirmation is sent). The acceptance of these general terms and conditions is derived from the fact that the buyer does not protest against the content within a reasonable period of time. You will therefore have to provide the new terms and conditions to all new customers.
This is actually your contract. Here you state not only which items will be delivered, but also the agreements that you make with the customer. What do you keep in mind when writing orders?
- Use the correct order forms. For example, don’t let your agent use his / her own order forms;
- Provide a correct reference to the applicable general terms and conditions;
- State the delivery period, delivery conditions and payment condition (s);
- Include a dissolution clause. This gives you the option of postponing or canceling the delivery;
- Remplacement ensures that if it later turns out that you cannot deliver items, you have the right to offer replacement items. This does not mean that your customer has to accept this;
- Make sure you provide conditions (provable);
- You agree a retention of title;
- You have the order signed by a person authorized to sign.
After the order has been placed, you have applied for and confirmed a credit limit or have set it yourself. The next step is the order confirmation. In any case, state the following:
- A description of your product or service, possible adjustments;
- The volume or the number;
- The price;
- The currency in which the customer must pay;
- The period to return to the order in the event of a dispute;
- The retention of title;
- The payment and delivery conditions
Before you deliver, it is advisable to first carry out a number of checks. The most important checks are:
- Check whether there is a payment delay at that time;
- When you receive the signaling list with overdue customers from us, you check whether there is a list placement;
- In the case of credit insurance, just check the validity of your credit limit;
- There may be other details. Your sales department and / or the account manager may still have information about a certain situation at your customer. This may be a reason to hold on to the delivery.
From the moment you deliver, you no longer have control over the goods. You must ensure that you send the invoice immediately upon delivery. Your invoice must at least state:
- Correct addressing, indication of invoice number and date;
- Payment condition and expiration date;
- A brief description of your product;
- The number or volume;
- The amount in the agreed currency;
- Reference to terms and conditions.
Keep as much limit data as possible (these have been checked with Chamber of Commerce data). Is there a different delivery address: state this separately!
Debtor management and payment delay
If your oldest invoice has not been paid 60 days after the due date, we speak of a payment delay. What does payment delay mean for you? You must make a decision: do you still (temporarily) accept the outstanding claim for that moment, or do you transfer the claim to a collection agency? When you have credit insurance, this is actually no longer a free choice. In the event of a late payment, there is a threat of damage, which means that you must immediately proceed to collect. In addition, a payment delay also means a stop for new deliveries. You must now report disputes to us.
Source: CRDT Credit & Finance