Ltd Company Invoice Query

[StevenBrown]

Hi
I have some very simple questions to ask, but like the saying goes if you don't ask you don't find out.
Me and a partner are starting a Ltd company this month, we are registered with Companies House and are also VAT registered. We will be offering a utility mapping service to contractors nationwide.
My question is if we quote for a job and are successful what would be all the steps involved. We can do the site work quite easily but the office side is completely new to us both.

I am guessing if we won the contract we would recieve some sort of confirmation from the client (Purchase order???) then after the job is complete we would invoce the company involved to recieve a payment.

This was all sorted before using invoice finance, but if it is easy enough we will consider doing it for ourselfs.

Thanks, any amount of advice no matter how small would be appreciated.

 

[termsandconditions]

The problem with waiting for a Purchase Order is that your company is at risk of automatically surrendering to your client's Purchase terms and conditions. Such terms are written to protect the Buyer (your client) rather than the Seller (your company). For example, purchase terms and conditions may state that payment will be made in 60 or 90 days. Your company, on the other hand, may require payment sooner than that.

Unless, you have the financial backing comfortably to fund cash flow for up to a quarter of your annual turnover, I would look at another way. I suggest the following:

1. Issue your quotation with attached terms and conditions (yours)
2. At the same time or shortly thereafter, request that your client completes a Credit Account Application Form again linked to your own terms
3. Credit Check on your new client
4. Decision tree for less than favourable credit check results e.g. director's guarantee, deposits, up front payments etc.
5. Client accepts your quote by signing it and your terms of trade

Advantages:
i) So even if your client produces his own purchase terms, you will be in a stronger position to negotiate the key areas such as payment terms.
ii) Your rights are protected while you do your work as everything is in writing
iii) Chase for payment more effectively depending upon your credit management related terms e.g. Default & Consequences of Default