How do you formulate your terms of payment? How with our template

How do you formulate your payment terms?

As part of an exchange B2B In order to meet your customers' needs, it's essential to precisely define payment terms. Key elements to include are :

• Payment deadline

• Authorized payment methods

• Penalties for payment incidents (late payments, fixed indemnity for collection costs)

• Discount conditions, if applicable

Where to formalize payment terms?

These conditions must be clearly stated in your General Terms and Conditions (GTC) and on every invoice. For companies whose main customers are other professionals, GTCs can be supplied on request, but it is advisable to include payment terms on all invoices to avoid any misunderstandings.

We also recommend reiterate these conditions in reminder emails to enhance customer clarity and commitment.

Our template: a concrete example of payment terms

Here is an example of how to formulate payment terms:

"Invoices must be paid in Euros (€) immediately upon receipt, and within X days at the latest. (less than or equal to 45 days end of month or 60 days) from the date of issue.

Any failure to pay will result in the application of late payment penalties at the rate of X%. (minimum rate of three times the legal interest rate in force in France) 40 (forty) euros to cover collection costs, which will be due automatically without the need for a reminder."

The content of your payment terms

The most important aspect of your payment terms: the payment period granted to your customers

The payment term is the central element of payment conditions. It defines the period granted to the customer to settle an invoice after receipt . This period must be reasonable et adapted the needs of both the company and its customers.

Un too short a time could be restrictive for customers while a too long could affect the company's cash flow.

For example, Amazon Business offers a standard 30-day payment term
condition-of-payment-Amazon-Business

Authorized payment methods

It is important to clearly specify the payment methods your company accepts . This can include traditional methods such as the bank transfer or cheque, as well as more modern options as the online payment or by credit card.

Clear communication about accepted payment methods helps prevent misunderstandings and makes the payment process easier for your customers.

Amazon Business, for example, accepts a variety of payment methods, offering business customers practical and diverse options for paying for their purchases.

payment-methods-Amazon-Business

What are the different types of payment methods?

The payment options available to businesses vary according to their specific needs and customer base. Here is a list of commonly used payment methods:

• Bank transfer : Preferred for its simplicity and security.

• Credit card : Fast and convenient, often used for online transactions.

• Cheque : Although in decline, still used in certain sectors.

• Cash payment : Used for small or local transactions.

• Electronic payment : PayPal, Transferwise, etc. Suitable for e-commerce and international payments.

• Direct debit : Ideal for recurring payments.

These options include, Hero Checkout stands out as an innovative solution specially designed for the B2B sector. This online payment system enables companies to offer their business customers flexible payment options such as the deferred payment or the payment by instalments .

Penalties applicable in the event of late payment or collection

In case of late payment it is common apply penalties . These penalties are generally expressed in terms of annual interest rate applied to unpaid amount .

For example, a company may apply a penalty of 8% per annum on late payments.

The law, as Article L441-10 of the French Commercial Code also provides for the possibility of apply a fixed indemnity for collection costs, a fixed sum of 40 euros.

Discount conditions

Discounting is a early payment discount . Although not mandatory it can be an effective tool for encourage prompt payment .

For example, a company might offer a 1% discount if the invoice is paid within 10 days of issue. This can be particularly attractive to customers looking to save money, while improving the company's cash flow.

Penalties for terms of payment not included in the GTCS?

L' absence of payment terms in the GTCS can lead to penalties for companies . If the terms and conditions of sale do not clearly specify payment terms, this can lead to disputes with customers and potentially to penalties .

In France, the French Commercial Code requires that payment periods t, late payment penalties et discount conditions are explicitly mentioned in the GTC to avoid any misunderstanding or abuse.

What does the LME Act of 2023 stipulate about payment terms?

La Economic Modernization Act (LME) of 2023 strictly regulates payment terms in B2B relationships. It limits the standard 30-day post-delivery lead time or service. Under certain conditions, it authorizes maximum 60 days after invoice issue, or 45 days end of month .

How can I secure payment of an invoice?

Securing invoice payments is essential for any B2B company. There are several strategies you can adopt:

• Use invoice management software for monitoring and control

• Requiring guarantees or deposits

• Implement penalties for late payments

With tools like Hero companies can secure and accelerate their collections, thereby strengthening their financial stability and respecting their customers' interests. terms of payment .

Frequently asked questions :

Who sets the terms of payment?

Payment terms are established by the supplier for its customers, based on the provisions of the French Commercial Code. These terms must be fair and comply with current legislation.

How do I write a payment undertaking?

A payment undertaking must be drafted clearly and precisely, indicating the amount due, the payment terms and deadlines. It is crucial to include all relevant details to avoid any ambiguity.

What are terms and conditions of sale?

The General Sales Conditions (GSC) define the terms and conditions of a transaction between a seller and a buyer, including payment terms. They are essential for clarifying the expectations and obligations of each party.

How do you translate "terms of payment" into English?

In English, "conditions de paiement" translates as "payment terms".

What is a payment terms table?

A payment periods table is an accounting tool used to monitor and analyze payment periods granted to customers and suppliers, helping to manage cash flow effectively.

Can 90-day payment terms be applied?

No, the maximum authorized payment term is generally 60 days end of month. Payment terms of 90 days are reserved for certain specific situations, such as exports outside the European Union. They must be clearly stipulated in the terms of payment.

What is the legal deadline for payment of an invoice by a private individual?

The legal deadline for payment of an invoice by a private individual is generally 30 days, in line with established standards for commercial transactions.

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