Terms & Conditions: The Essential Guide And Why You (Yes, You) Need One

Welcome to the wild world of running a business. The land of invoices, late payments, cancelled jobs, customers who suddenly “aren’t happy anymore,” and that one client who swears the email never arrived.

Whether you’re offering a service or simply selling something online, sooner or later, you’re going to need a guardrail. That guardrail is the humble but powerful Terms and Conditions.

Here at Debt Free, we’ve seen it all, from unpaid invoices and asset-stripped companies to directors vanishing into thin air faster than last night’s takeaways.

And we’ve also seen what happens when businesses get their contracts right.

What Are Terms & Conditions, Anyway?

Terms and Conditions are a legal agreement between you and your customers or clients. They set out the rules for how your services are used, what you promise (or don’t promise), and what happens if things go off the rails. In short, they define the rules.

They also enforce and protect your intellectual property, limit your liability, and clarify both your obligations and those of your customers.

Terms and Conditions are the operating manual for your business and define:

They set the rules before emotions arrive. Without them, you rely on:

verbal promises, implied agreements, and …hope.

Without Terms and Conditions, you’re relying on good faith and crossed fingers. And we can tell you from experience, hope is not a successful collection strategy.

Why Every Business Needs Terms & Conditions (Yesterday)

Let’s be blunt. Without enforceable Terms and Conditions:

With properly drafted Terms and Conditions:

In short, your Terms and Conditions determine whether you operate like a business… or like a financial charity or interest-free financier.

What We See When Businesses Don’t Have Terms and Conditions.

Every week we hear:

“They went into liquidation.”
“They’re disputing it now.”
“They are disputing the collection costs.”
“They won’t pay legal costs.”
“They’ve sold everything.”
“The director disappeared.”
“The trust owns the assets.”
“We can’t do anything quickly.”

In most cases, it’s the lack of enforceable paperwork.

Terms and Conditions must be in place before problems arise. Not while you’re chasing money or after a liquidation. Not once lawyers appear. You don’t install sprinklers after the fire.

“But We’ve Always Done It This Way…”

This is one of the most expensive sentences in business history. Just because someone paid you in the past does not mean they’ll pay you in the future. Repeat that.

Your best customer today can:

Terms and Conditions don’t create distrust. They create certainty. They protect relationships by preventing misunderstandings before they start.

Why Good T&Cs Change Behaviour Instantly

Debtors behave differently when:

When paperwork is weak, delays multiply. When paperwork is strong, payments happen faster. Simple.

Why Debt Free Terms & Conditions Are Different… Guaranteed.

We don’t build “Standard Terms and Conditions”. We build bespoke protection. We draft guaranteed, enforceable Terms and Conditions to get paid. Our documents are backed by the best lawyers in New Zealand and are designed specifically for:

Everything is written for what happens when things go wrong. Because that’s when contracts matter.

Final Thought

Running a business is not for the faint-hearted. Some days, things flow perfectly. Other days, jobs are suddenly “disputed”, payments are “being processed next week (fingers crossed)”, and customers who were friendly last week are now impossible to reach.

That’s the reality of business.

And it’s precisely why expanding on hope, handshakes, and good intentions is not a strategy; it’s a gamble.

Your Terms and Conditions are the guardrail that stops your business from going over the edge when things get messy. They are the structure that holds when relationships strain, cashflow tightens, and excuses multiply.

When Terms and Conditions are correctly written, disputes shrink. Payments happen faster. Risk reduces. Leverage increases.

At Debt Free, we’ve seen both sides of this story. We’ve watched poor paperwork burn strong businesses. And we’ve seen solid contracts turn difficult situations into fast recoveries.

And when the day comes that someone decides not to pay you, and it will, you’ll be very glad you took the time to protect yourself.

Because Terms and Conditions doesn’t stop problems entirely… but it does make them solvable.

Mark Mclachlan

PPSR: The Essential Guide to Becoming a Secured Creditor in New Zealand (Or How Not to Become Poor in Liquidations)

Welcome to the not-so-glamorous side of business ownership. Where invoices don’t always get paid, customers sometimes vanish, and the phrase “we’re just waiting on finance” becomes all too much of a reality.

If your business sells on credit or lets customers pay after the work is done… then you are a lender. And if you’re a lender without security, you can easily become a volunteer.

Here at Debt Free, we deal with one thing every day: businesses who didn’t think they needed protection… until they desperately did.

If you’ve ever:

Then this article is for you.

What Is the PPSA and Why Should You Care?

The Personal Property Securities Act 1999 (PPSA) changed the game in New Zealand.

Before it existed, if a debtor went under, you were:

Now?

The law gives you a way to stake your claim.

The PPSA governs the creation, prioritisation, and enforcement of security interests over personal property. That personal property includes things you probably care about, like security over materials and money.

The Act also created the PPSR, the Personal Property Securities Register, to make those security interests visible and enforceable.

Think of the PPSR as a public noticeboard that tells the world: “That money or asset is mine if things go wrong.”

The PPSR is an online government register. It lets you:

and avoid becoming an afterthought when insolvency hits.

If it’s not registered… You don’t exist.

If it is registered… You’re playing in the real league.

The PPSR decides:

Spoiler: unsecured creditors don’t usually win.

No agreement = no protection.
No registration = no priority.

The Liquidator’s Letter You Never Want to Receive.

And here’s the kicker…

Being unsecured doesn’t just mean you might not get paid.

It can mean you have to give money back.

Most business owners are shocked when they discover this:

If your customer pays you…
…and then later goes into liquidation…

…the liquidator may demand the money back.

Why?

Because the law allows liquidators to claw back payments paid to unsecured creditors within:

That’s called a voidable transaction.

You get paid.
You celebrate.
Months later…
You’re told to return the money.

Why?

Because you were unsecured.

And unsecured creditors don’t often “get lucky” in insolvency.

This rule exists to stop fraud, favouritism and manipulation.

But it hits innocent businesses hardest… unless you secured your position.

How the PPSR Makes You Bulletproof

If you’re registered correctly on the PPSR:

In liquidation…

Security wins.

Why Debt Free Does This Differently

We don’t just register interests.

We build:

Because registering is not enough.

Managing it properly is what keeps you paid.

Final Thought

The PPSR didn’t create risk…

It exposed it.

And it gave business owners the power to eliminate it.

Before the PPSR, you had no choice.

Now you do.

You can:

Or you can:

The PPSR doesn’t favour the biggest business.

It favours the smartest one.

And the smartest ones register.

Mark Mclachlan

Avoiding Bad Debtors and Bad Decisions: A Survival Guide by Debt Free

Bad debt is a bit like a leaky roof; you don’t notice it when the sun’s out, but once the storm hits, it’s catastrophic and expensive.

At Debt Free Ltd, we’ve seen more invoices go missing than jandals at the beach. Friendly clients who suddenly “can’t talk right now”, payments that “should be showing in your account”, and business owners who trusted a handshake.

Why Bad Debt Is the Silent Business Killer

You can have the best tools, the hardest-working team, and a calendar booked out like a summer campground… and still run out of money if your customers don’t pay on time.

In New Zealand, one of the biggest reasons businesses fail isn’t lack of work; it’s unpaid invoices. Cash flow issues sneak up quietly, then hit harder than an enraged prop.

The solution?

Solid systems. Legal protection. And a lot less hoping for the best.

Get Your Terms & Conditions Sorted (Before You Supply Another Thing)

If you don’t have enforceable Terms & Conditions, you’re basically lending money with crossed fingers.

Your Terms should cover:

If your Terms were written years ago, by “a mate who’s good with words”, it’s probably time for a grown-up version.

Credit Check New Clients (Because Nice Blokes Don’t Always Pay)

Before you extend credit, check who you’re actually dealing with.

A credit report tells you:

A clean shirt and a good yarn don’t mean good credit.

We partner with Centrix, New Zealand’s leading credit bureau, so you get real data, not gut feelings.

Set Credit Limits (And Stick to Them)

Set a credit limit. Respect it.

And don’t “just one more job” your way into disaster.

If a client wants more credit, approve it before you supply, not after your invoice becomes a problem.

Credit limits aren’t being mean. They’re being smart.

Incentivise Early Payment (Kiwis Love a Good Deal)

Early payment discounts work because:

Just remember:

Discounts reward good behaviour.

They aren’t sympathy payments.

Invoice Fast (Not When You Remember)

The longer you wait to invoice, the longer you wait to get paid.

Send invoices:

If your invoicing system is slower than rural broadband, it’s costing you money.

Follow Up Quickly (Silence Is Not a Good Sign)

If a customer starts:

That’s not admin. That’s your early warning system screaming at you.

Ignore it… and you’ll be the one left holding the bill when liquidation hits.

A Few Smart Extras (For the Business Owner Who Wants to Sleep at Night)

Not every late payer is a villain. Sometimes:

Your job?

And if it keeps happening? Stop being patient and start being protected.

Bottom Line

Bad debts don’t just “happen”.

They happen when businesses trade on hope rather than on systems.

At Debt Free Ltd, we help New Zealand businesses:

Being busy doesn’t mean much if you’re not being paid.

If your invoices are giving you headaches… It’s time to stop chasing and start protecting your cash flow and your sanity.

Mark Mclachlan

Voidable Transactions & Clawbacks: What Every Kiwi Business Should Know

Cash flow isn’t just about getting paid. It’s about keeping it.

Imagine you’ve just nailed a big job, invoiced the client, and the money’s in your bank. Sweet as. But what if the company goes belly-up a few weeks later, and the liquidator demands you give that money back? Painful, right? That’s the reality under New Zealand’s law on “voidable transactions” (aka clawbacks).

At Debt Free, we don’t like unpleasant surprises. That’s why we’ve put together this guide: to show you how clawbacks work, when you might be vulnerable, and what you can do to avoid getting caught out. Consider it your insolvency raincoat, just in case the weather turns bad.

What is a Voidable Transaction (and Why Should You Care)?

A voidable transaction, also known as a clawback, is a payment or transfer made by an insolvent company that unfairly prefers one creditor over others. If the company ends up in liquidation, the liquidator can “unwind” that payment, demanding the funds back so the money can be shared fairly among all creditors.

When can it happen?

In short, if you were paid just before a company collapses, even innocently, you might end up being asked to hand that cash back.

Types of Voidable Transactions (The Usual Suspects)

The “Good Client Gone Bad” Payment

They were paying fine… until they weren’t.
Then one last payment lands.

That’s often the one the liquidator wants back.

The “Mate’s Rates” Deal

Assets sold cheap.
Invoices forgiven.
Debts magically disappear between related parties.

Liquidators hate this stuff.

The “Director Shuffle”

When money or assets start moving between related companies, shareholders, or family members, before liquidation.

Red flag?
Yes.

Also, “transaction” in this context is wide-ranging: money paid, property transferred, charges created, even some credit-note or receivable assignments. Doesn’t matter whether it’s a court order, a cash transfer, or a property swap. If the substance is a payment or transfer, it counts.

The Law Behind the Curtain — What Sections 292–296 of the Companies Act Mean

Can You Fight a Clawback?

If you acted in good faith, had no reasonable grounds to suspect insolvency, and gave value (or changed your position believing the payment was valid), the clawback may not succeed.

Notably, the Supreme Court ruling in Allied Concrete Ltd v Meltzer confirmed that “gave value” can refer to value given when the debt was originally incurred, not just contemporaneously with the payment. That gives creditors some protection… but being secured is a far safer and lower cost option.

But here’s the catch…

Liquidators start with “Pay it back”.
You respond with “Here’s my evidence”.
And guess who usually wins if your paperwork is not up to scratch?

Not you.

Real-World Example: When Things Go Really Pear-Shaped

Picture this: You’ve been supplying building materials to a construction company. A bit before they go under, they make a big payment to you, everything’s all good. But then, liquidation hits. The liquidator reviews transactions from the past six months and sees your big payment. Under insolvency law, that payment might be considered a preferential payment. You get a letter demanding repayment.

That’s not theory. That’s what can actually happen under the clawback regime. You might (and likely will) be expected to hand the funds back, even if you didn’t know anything about insolvency or that the company was on its last legs. That’s the reality of voidable-transaction law.

So, What Should a Business Owner Do to Protect Themselves?

Why Debt Free Ltd Thinks About This So You Don’t Have To

At Debt Free Ltd, we don’t just help recover debts; we help you stay protected before you even issue an invoice.

Because once liquidation happens, the liquidator doesn’t care whether you were a friendly creditor or a trading partner who gave the benefit of the doubt. If the money was paid within six months and the company was insolvent, it’s game on, and you might get a clawback notice.

We help you:

In short, we try to make sure you get paid, and that when you do, you actually keep it.

Final Thought

If you want your payments to survive liquidations, your contracts to bite back, and your cash flow to stay yours… Debt Free Ltd is here to help.

Mark Mclachlan

Effective Debt Collection: How to Stop Waiting on Late Payers (and Make Your Cash Flow Sing)

Debt collection isn’t fun, but neither is carrying cashflow stress on your back. At Debt Free, we know chasing unpaid invoices is about as enjoyable as mowing the lawn in a southerly. The good news is that with the right systems, you can turn slow payers into on-time payers, or at least stop carrying the stress alone.

Here’s how to get paid faster, argue less, and sleep better.

Prevention: Because “Fingers Crossed” Isn’t a Payment Strategy

Get the paperwork sorted before the job starts.

Strong debt collection begins before the invoice is even typed.

Clear Terms and Conditions, proper credit checks, and defined payment expectations prevent most payment issues long before they arise.

If you don’t decide who gets credit, the market will decide for you. And it won’t be kind.

Build an Invoicing System That Actually Works

A weak invoicing system is like locking the gate but leaving the fence down; you’re not really keeping anything in.

Invoice fast and clearly.

The shorter the time between completing work and sending the invoice, the faster payment tends to follow.

Shorten your terms where possible

The longer your payment terms, the longer your money works for someone else.

Automate your system

Software doesn’t forget. People do.

Use accounting systems that automatically send invoices and reminders. A few gentle nudges near the due date prevent many “I forgot” scenarios.

When Payments Don’t Arrive, Act Immediately

The longer a debt sits, the harder it becomes to recover.

Follow up early.

The day an invoice goes overdue is the day the phone should ring.

Often, the delay is administrative. Sometimes it’s intentional. Either way, silence helps no one.

And know when to shut off credit.

If a client continues to delay payment, stop extending terms. Refusing further supply until outstanding balances are resolved is often the fastest way to restart payment behaviour.

Set Targets and Measure Progress

Your debtors’ ledger should not be a mystery novel.

Monitor:

If debts average 55 days, aim for 40. If they average 40, aim for 30.

Cashflow improves not by hoping, but by measuring.

Common Traps That Hurt Businesses

Some mistakes quietly destroy good cashflow:

Large jobs without deposits. If it’s a big job, take a deposit. Progress payments reduce exposure and increase seriousness.

Dependence on a single client. A business that relies on a single large customer isn’t stable; it’s vulnerable.

Being “too nice” as a new business. New businesses are often targeted by clients who’ve burned other suppliers.

Professional caution is not mistrust.
It is survival.

When Chasing Doesn’t Work, Get Support

If invoices remain unpaid after consistent follow-up, professional collection assistance may be your best option.

Time spent chasing old money is time not spent earning new money.

Outsourcing recovery improves both cash flow and sanity.

The Real Cost of Late Payments

Unpaid invoices don’t just reduce income. They:

The cost is not just financial, it is personal.

Final Word

Debt management is not about being tough. It is about being prepared.

Strong terms. Better credit checking. Fast invoicing. Consistent follow-up.

Those are not aggressive practices.

They are professional ones.

Your workmanship might sell the job, but your systems determine whether you ever get paid for it.

Set your standards early. Enforce them consistently.

And don’t feel guilty for expecting to be paid for your work.

Mark Mclachlan

Why Debt Free’s Passion Is Your Best Defence

At Debt Free, our passion for what we do is not just a marketing tagline; it’s the engine that drives our entire business. We don’t just manage debts; we protect livelihoods.

We’ve taken countless calls from business owners in crisis. Companies facing unending disputes because they skipped proper Terms & Conditions; sole traders who did a top-quality job only to face a legal blockade and their own insolvency; A builder who forgot to put a subcontract agreement in place, left hanging when a subcontractor installs faulty products across multiple properties.

We’ve seen what happens when paperwork is weak or non-existent, and the fallout can be brutal. But we’ve also witnessed the inverse: when our clients come to us using our solid Terms and Conditions, good credit practices, and the backing of our debt-recovery tools, they dodge disasters.

Sometimes what we help them recover isn’t just cash, but their business’s future, their family’s security, and their peace of mind.

We could call it “just business.” But we don’t.
Because to us, it’s personal.

Passion Matters. Especially When Stakes Are High

Research shows that entrepreneurs driven by genuine passion, whether for the product, the process, or the purpose, are far more likely to push through challenges, stay committed, and build sustainable businesses.

Passion fuels resilience. It gives you the fire to tackle tough situations, like unpaid invoices, legal disputes, or clients who vanish. Without passion, you’re just running a business; with it, you become a protector of value, trust, and fairness.

At Debt Free, our passion isn’t just for debt recovery; it’s for giving you back control. When you call us because a major job has gone sideways, or a once-reliable client refuses to pay, you’re not just another file on our desk. You’re someone who believed in their work, put in the sweat, and deserves to be paid.

That belief drives us harder than any fee schedule.

Real Problems We’ve Seen And How They’re Preventable

Here’s what we hear regularly:

These situations are avoidable. Not because business is easy, but because with the right paperwork, clarity, and protection, you put yourself in control.

We’ve helped clients avoid these disasters. We’ve seen clients save tens, hundreds, or even millions of dollars, enough to protect their business or even save their family home.

That’s why we get out of bed in the morning.

We’ve Seen Both Ends of the Spectrum, And We Choose to Change It

We’ve seen businesses collapse not because they lacked skill or heart, but because they lacked proper protection. We’ve seen honest tradies left chasing ghosts. We’ve seen companies bleed cash when clients delayed payment, disputed jobs or went bust.

But we’ve also seen the other side: businesses saved, cashflow restored, families secured. Practices that looked like paperwork saved livelihoods. Contracts that looked like formality delivered real-world results.

That’s why Debt Free exists.

Because we believe in business, we believe in tradespeople. We believe in fairness.

And we believe that passion, when combined with clarity and structure, can make all the difference.

Final Word

If you’re serious about your business, treat your paperwork with the same respect as your workmanship.

If you’ve ever swallowed the line “we’ll sort payment later,” stop.

If you’ve ever thought, “we don’t need a contract, we trust them,” think again.

Because in business, as in life, passion matters. But what you invest that passion into matters even more.

Mark Mclachlan