Commercial contracts may specify when a business can file a claim against a customer for an outstanding invoice. As explained by Chron.com, commercial agreements may include payment conditions. They may also note the interest or fees charged when submitting payments late.
Contract terms may describe what action a company can take related to unpaid invoices. If a customer refuses to pay because of a poor-quality product or service, a contract may also outline how parties could choose to resolve the issue.
Adding a clause for mediation or arbitration
Mediation may offer businesses and their customers a cost-effective way to resolve problems. Parties may avoid going to court by following a contract’s mediation terms, which allows their representatives to negotiate and settle the matter for them.
As explained by the Oklahoma Bar Journal, arbitration may allow businesses to control the negotiation process until the parties reach an acceptable outcome. Unlike mediation or arbitration, court cases generally rely on judges and juries to hear each party’s position.
Drafting agreements that outline payment terms
As noted by Business.com, many companies do not begin working on projects or shipping goods until customers provide a down payment or deposit. Contracts generally outline a percentage of the final price that customers need to pay upfront. It may also include terms for paying the balance after completing a project.
The customers you hope to attract may find alternative resolution methods and installment plans conveniently. Terms and conditions of an agreement may include how often a business sends invoices and when customers must pay them. Contracts may also outline late-payment or dispute arrangements that may help avoid going to court to resolve.