Credit terms
The conditions on which you supply customers on credit — when payment is due and what applies if it is late.
What it means
Credit terms are the agreed conditions on which you let a customer buy now and pay later — most importantly the payment period (for example, payment due within a set number of days of invoice), along with any early-payment incentives or consequences for late payment.
Clear credit terms, set out in your terms of trade and accepted before supply, are the foundation of straightforward collections and recovery if a customer does not pay.
Setting them well
Terms that are too generous lengthen your debtor days and tie up cash; terms that are too tight can deter customers. Spelling out due dates, any interest on overdue amounts and recovery costs strengthens your position. Stating terms clearly on every invoice — easy with Merion invoicing — removes ambiguity about when payment is due.
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