Here’s the uncomfortable truth:

If your terms and conditions are vague – or worse, non-existent – you’re making it way too easy for clients to pay late (or not at all).

For many small and medium-sized businesses, unclear payment terms are one of the biggest reasons cash flow gets choked. Without clearly defined expectations, you’re left chasing overdue invoices, arguing over what was agreed, and hoping the client “does the right thing.”

But it doesn’t have to be that way.

Strong terms and conditions (T&Cs) are more than just fine print – they’re your first line of defence when it comes to getting paid on time. They tell clients exactly what’s expected, when payment is due, and what happens if they don’t pay.

In this guide, we’ll break down what to include in your T&Cs, how to tailor them to your industry, and how to use them properly so you can stop chasing payments and start getting paid faster.

Why terms and conditions matter more than you think

You might assume that a good relationship and a handshake is enough. And in some cases, it is – until it isn’t.

If a client delays payment or disputes what they owe, your T&Cs become your safety net. Without them, recovering the debt becomes a whole lot harder – and often more expensive.

Here’s what solid terms and conditions can do:

• Set expectations upfront – so clients know exactly when and how they need to pay
• Create accountability – putting the pressure back on the client, not you
• Support legal action if needed – especially if you end up needing help from a debt collection agency
• Prevent misunderstandings – around pricing, scope, timelines, and cancellations

Think of T&Cs like the rules of the game. If no one knows the rules, everyone plays dirty – or worse, walks off the field.

The essentials: what every business should include

No matter what kind of business you run – whether you’re in trades, consulting, retail, or professional services – there are a few key things every set of T&Cs should cover. These aren’t just formalities – they’re the foundations that support faster payments and protect your bottom line.

Payment terms and due dates

This one’s simple, but often overlooked. Don’t just say “payment due on receipt” or “within 30 days.” Be specific.

Example:
“Payment is due within 14 calendar days of the invoice date, by 5pm AEST.”

Specific dates create clarity. Vague language creates excuses.

Accepted payment methods

Spell out exactly how you want to be paid – bank transfer, credit card, BPAY, direct debit, etc. If you charge processing fees for card payments, that needs to be clearly disclosed here.

Making it easy and transparent for customers to pay helps reduce delays and disputes.

Late payment penalties

Late fees are one of the simplest ways to encourage faster payments – but they only work if you include them in your T&Cs.

For example, you might charge:

• A flat admin fee for overdue invoices
• Interest of 2% per month on outstanding balances
• Debt recovery costs (if you need to escalate the matter)

Important: These must be clearly outlined in your terms to be enforceable. And they should be fair and reasonable – penalties that feel punitive can backfire.

Consequences of non-payment

Don’t leave this part open-ended. Your terms should explain what happens if the customer doesn’t pay at all. That might include:

• Suspending services until payment is made
• Referring the account to a debt collection agency (like JMA)
• Adding legal and recovery costs to the total amount owed

Clarity here often motivates clients to pay before it gets to that point.

Personal guarantees (for business clients)

If you’re working with a company, consider requesting a director’s guarantee – especially for new clients or large accounts.

This allows you to pursue the company director personally if the business shuts down or disappears. It’s one of the best tools to protect yourself when trading on credit.

Jurisdiction and dispute resolution

This section simply outlines how and where legal disputes will be handled. Including your home state or territory (e.g. “All disputes will be handled in the state of Victoria”) can save a lot of time and cost later on if things go south.

Tailoring your T&Cs by industry

While every business should have the core elements covered, the details in your terms and conditions should reflect the type of work you do. Here’s how to fine-tune them for maximum protection and faster payment across different industries.

Trades and construction

Late payments are common in this sector, so your T&Cs need to be watertight.

Include:

• Scope of work – Be crystal clear about what’s included (and what’s not). Disputes often come from assumptions.
• Variation clauses – If the client requests additional work, state how you’ll charge and when payment is due.
• Progress payments – For bigger jobs, break down payments into stages and link them to milestones.
• Retention and warranties> – If clients are withholding payment for defects, your T&Cs should set limits on how much and for how long.

A strong paper trail can save you weeks of chasing payments at the end of a job.

Creative and service-based businesses

If you’re a designer, marketer, consultant, photographer, or anyone offering a professional service, your T&Cs need to protect your time and intellectual property.

Include:

• Deposit requirements – State how much is required upfront to start the work.
• Milestone billing – For larger projects, break payments into clear stages.
• Cancellation or kill fees – If a client pulls the pin mid-project, make sure you’re compensated for work already completed.
• IP ownership – Spell out when ownership of deliverables passes to the client (usually after final payment).

This protects you from doing lots of unpaid work – or handing over files before the invoice clears.

Product-based businesses and wholesalers

For businesses dealing with stock or large product orders, cash flow often hinges on timely payment. Your terms should make it clear:

• When payment is due – On order, on delivery, or net 30? Be clear.
• Who owns the goods – Include a “retention of title” clause (goods remain your property until paid for in full).
• Delivery and return terms – Who pays for freight? What’s your returns policy?
• Minimum order values – If applicable, state the minimum quantity or value for orders to be accepted.

These inclusions reduce misunderstandings and give you more leverage when dealing with slow-paying customers.

Don’t just have T&Cs – use them properly

Having a solid set of terms and conditions is a great start – but they’re only useful if you actually apply them. One of the most common mistakes we see? Business owners include their T&Cs in a document somewhere… but never actually get clients to agree to them.

Here’s how to make sure your terms aren’t just legal wallpaper.

Make sure your clients see and accept them

It’s not enough to include your terms in the fine print of an invoice or hide them on your website. For them to be enforceable, your client needs to receive and agree to them before the work begins.

That might mean:

• Getting a signature on a contract or service agreement
• Including a checkbox on your quote acceptance form
• Clearly stating “by accepting this quote, you agree to our terms and conditions” with a visible link

If you can’t prove the client agreed to your terms, enforcing them later becomes a lot harder.

Attach them to every quote, proposal or invoice

Make your T&Cs a standard part of your communication – not something you only bring up when things go wrong. This builds consistency and sets expectations from the start.

Tip: Make sure the version date or document title is up to date so you’re always referencing the latest terms.

Keep them updated

Your terms shouldn’t be a one-and-done document. As your business evolves, your T&Cs should too. For example, you might need to update:

• Payment terms when switching to upfront deposits
• Delivery timeframes due to supplier delays
• Dispute resolution clauses to match current legislation

Review your terms at least once a year – or any time something changes in how you operate.

When your clients know exactly what’s expected of them – and what happens if they don’t pay – there’s less room for confusion, negotiation, or delay. Strong terms and conditions set the tone early and remove ambiguity, which is one of the biggest causes of payment disputes.

Here’s how clear T&Cs help you get paid faster:

Clients take you seriously

When your documents look professional and your terms are clear, clients are more likely to prioritise your invoice. Vague or overly casual arrangements tend to get pushed down the list – especially in tight cash flow situations.

You avoid misunderstandings

Miscommunication about payment dates, fees, or what’s included in the job can lead to arguments, delays, and unpaid invoices. Clear T&Cs prevent these issues from the start, protecting both you and the client.

You gain legal leverage

If you do need to escalate things, having signed, enforceable terms puts you in a stronger position. Whether you’re sending a letter of demand or engaging a debt collection agency like JMA, clear terms make it much easier to take action.

Payment becomes a process – not a negotiation

You shouldn’t have to explain your pricing or chase money every time you finish a job. With strong terms in place, getting paid becomes a predictable part of your workflow – not a stress-inducing gamble.

Final thoughts: strong T&Cs = stronger cash flow

You can’t control the economy. You can’t control your clients’ priorities. But you can control how your business sets expectations – and that starts with clear, enforceable terms and conditions.

Think of your T&Cs as your silent business partner. They protect your time, your income, and your ability to act if something goes wrong. And in a world where getting paid on time is half the battle, that protection matters more than ever.

If you’re dealing with chronic late payments, difficult clients, or you’re just not sure if your current terms would hold up if challenged – it might be time for a fresh look.

At JMA Credit Control, we’ve helped thousands of Australian businesses get paid faster – by combining proactive systems with professional debt recovery when it’s needed most.

Need a hand? Let’s talk.
Contact us today and take the pressure off getting paid.