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Information about sales and delivery terms is a service to a company´s
customers. Informing them about the conditions they are doing business enables
them to back out if they do not agree to the terms.
Advisable
Written terms of sale and delivery are not statutory, but it is advisable to
work out such documentation in order to minimise the risk of problems and
disputes.
It is advisable to adjust your terms of sale and delivery to comply with
trade customs and general legislation.
Visibility
Terms of sales and delivery can be mailed out along with promotion material,
but a customer must, at the latest, be informed of such terms when the agreement
is made and they must be included in the agreement.
Pre-printed terms of sales and delivery on the back of the invoice is not
adequate. This is just a subsequent arrangement in order to secure payment for
work carried out or goods delivered.
Thus, terms of sales and delivery must be stated on estimates and quotations.
On the front page of the quotations it could refer to the back or enclosures for
such information.
The burden of proving that terms of sales and delivery was part of the
agreement lies with the seller. Thus, it is crucial to obtain the customer’s
confirmation of the existence of such terms.
Estimate
A sales pattern could be that the customer receives an estimate of a given
assignment. An estimate is a rough specification and maybe a price calculation.
It must appear from the estimate that it is only an estimate. It is important
that the customer knows that what s/he has received is an estimate, as estimates
are not binding.
Quotation
If the customer finds the estimate attractive, s/he may request a quotation.
Making a quotation is binding to the offerer for a specified period.
Specification of period may appear from the quotation.
Alternatively, trade customs may stipulate that quotations are binding for a
specific period. Otherwise, the period is the time the offerer of the quotation
estimates as being appropriate for the customer to consider the quotation and
respond to it.
Order Confirmation
To be sure that your deal is home and dry you need to have your customer
return a specified and signed order confirmation – and, if required, a signed
copy of the terms of sale and delivery.
- Go to next
business issue: Pricing - Based on Expenses
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Copyright © 2009 Dynamic Business Plan 07-02-2012
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