How Can Contract Billing Help my Business?
Contract Billing is one of the most important aspects of any business. It is the act of creating a contract for a business’ billing procedures.
For example, the contract signed upon receiving a credit card is just a contract that states you will be allowed to use the credit card services in exchange for paying a percentage of the total charged on a monthly basis. It works the same for any service orientated business that has the ability to continue providing a service or a series of services to a client. For instance you own a Computer Repair Shop where your field technicians perform preventive maintenance, information back-ups, virus cleanings, etc. A job like this cannot be done in one day, it must be performed over time. One option would be to offer quarterly and yearly plans to your clients.
To do so you would need to figure out how many hours your employees would have to spend on the clients property, what jobs would be completed and develop a price package for the various plans. This is where Contract Billing can help a business get the work and get paid.
Every time one of these plans is sold, both the business and the client must sign a contract stating something along the lines of: Every third Tuesday, XYB Computer Services will perform X duties on these specific computers. In return YOUR Client Corporation agrees to pay x dollars by the last day of every month beginning on day 1 until the last day.
Contract Billing protects both parties, ensuring the client gets the services he wants and is paying for and that the provider is getting paid. If either party fails on their part of the contract they can be taken to court and sued because there was a legal document in place
If a business begins the bad habit of agreeing to long-term services without a contract, it will not be long before they find themselves in front of a judge with no proof that an agreement was made through two parties. In today’s business world a hand shake is not enough. Get the signature on a legally binding contract and then seal the deal with a hand shake.
Don’t be mistaken though, Contract Billing is not only for long-term agreements, it is also for any job or service where payment will not be made upfront. The last thing you want as a brick layer is to finish a brick chimney that you designed yourself and even hand-made the bricks – just to find out the client is refusing to pay you or has skipped town. Contract Billing is crucial for doing any services that do not require upfront payment. Some feel that Contract Billing is a hassle and takes away from the time they could be doing the actual service.
It is important to realize that contract billing is designed to help and protect both parties. It is a little extra work and it does take a little more time but it is more than worth it when things go wrong. Things will go wrong, even if you only ever have one client default on payment, according to Murphy’s Law it will be the biggest sale of your life. Do not risk losing everything just to avoid some paperwork.
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