When you are running your own business, the last thing you need is to have clients who aren’t paying their bills on time. But what can you do about it?  In this article – the first in a series about debt recovery  for small business – Emily Shoemark and Gene Schirripa discuss the importance of having clear terms and conditions.

Terms and Conditions (T&Cs)

In terms of reducing the scope for debt recovery disputes, the best protection is T&Cs that are tailored to your business.
Your T&Cs should cover:

  • How you provide services and any products: The scope of service must be clear.
  • Payment terms. When is the customer required to pay? Do you require an up-front deposit? For bigger jobs, it’s advisable to request a 50% deposit up front, with the rest payable once the job is complete. If you bill after the job, then it should be clear how long the customer has to pay. You can include a term regarding interest accruing on overdue payments.
  • Client/customer obligations. What do you need the customer to do to ensure you can do the job properly? Think access to site, control on pets etc.
  • Warranties. What happens if the customer is unhappy? You can limit your liability, for instance if the work is defective, you will either re-do the work or pay for someone else to re-do the work (noting there are still statutory warranties afforded to consumers under Australian Consumer Law).
  • Privacy. How, and in what circumstances, you may use customer information.


To encourage customers to pay on time, it’s important that – in addition to having tailored T&Cs – you enforce those terms. If you have the ability to charge interest but never do, then your customer may place your bill at a lower priority than another business who is charging interest for late payment.

How can we help?

If you’d like to find out more about ensuring that you have the right terms and conditions in place, or debt recovery generally, contact our Business Law team on 02 6285 8000 or by email.