Account Receivable Policy

ACCOUNT RECEIVABLE POLICY AND AGREEMENT

This Account Receivable Policy (the "Agreement") is entered into as of this [Day] day of [Month], [Year] (the "Effective Date") by and between [Company Name], a [State/Country] corporation with its principal place of business at [Address] (the "Company"), and [Counterparty Name], a [State/Country] entity with its principal place of business at [Address] (the "Client").

1. RECITALS

WHEREAS, the Company provides [Goods/Services] to the Client in the ordinary course of business; WHEREAS, the Client desires to purchase said [Goods/Services] on credit terms, subject to the credit approval and risk assessment of the Company; WHEREAS, both Parties desire to establish a formal protocol for the issuance, management, collection, and resolution of Account Receivables to ensure operational liquidity and contractual compliance; NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. OPERATIONAL DEFINITIONS

1. "Account Receivable" means the outstanding balance owed by the Client to the Company for [Goods/Services] delivered, as evidenced by a validly issued invoice.
2. "Due Date" means the date upon which payment is rendered fully due, specifically [Number] calendar days following the date of invoice issuance.
3. "Default Interest" means the interest rate applied to overdue balances, calculated at [Percentage]% per annum or the maximum rate permitted by law, whichever is lower.
4. "Grace Period" means a period of [Number] business days post-Due Date during which the Company may refrain from initiating formal collection procedures.
5. "Disputed Amount" means any portion of an invoice challenged by the Client in good faith, provided that the Client has submitted written notice of such dispute prior to the Due Date.

3. SUBSTANTIVE TERMS AND OBLIGATIONS

1. Invoicing Protocol: The Company shall transmit invoices electronically to the Client’s designated billing address. The Client must confirm receipt within [Number] business days.
2. Payment Terms: Payment shall be made via [Wire Transfer/ACH] in [Currency] without deduction, set-off, or counterclaim, except for properly noticed Disputed Amounts.
3. Credit Limits: The Company hereby grants a credit limit of [Dollar Amount] to the Client. Any orders exceeding this amount require pre-approval in writing by the Company’s finance department.
4. Representations: Each Party represents that it has the full power and authority to enter into this Agreement and that the person signing this Agreement is authorized to bind the respective entity.
5. Performance Metrics: The Client acknowledges that timely payment is a material condition of the ongoing commercial relationship. The Company reserves the right to suspend performance of services upon the Client’s failure to meet payment obligations beyond the Grace Period.

4. DEFAULT, TERMINATION, AND REMEDIES

1. Breach of Payment: Failure to pay an undisputed invoice within [Number] business days after the Due Date shall constitute a "Payment Default."
2. Cure Period: Upon the occurrence of a Payment Default, the Company shall provide written notice of such breach. The Client shall have [30] business days to cure the default by rendering full payment including applicable Default Interest.
3. Remedies: If the breach is not cured within the Cure Period, the Company may: (a) declare all outstanding balances immediately due and payable; (b) initiate legal proceedings for collection; and (c) recover all costs of collection, including reasonable attorney fees and court costs.
4. Termination: Either party may terminate this Agreement upon [Number] days’ prior written notice for convenience. Termination shall not relieve the Client of the obligation to pay for services rendered prior to the effective date of termination.

5. BOILERPLATE LEGAL PROVISIONS

1. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [Jurisdiction], without regard to its conflict of law principles.
2. Dispute Resolution: Any dispute arising out of this Agreement shall be submitted to binding arbitration under the rules of the [Arbitration Association/Body] in [City, State]. The prevailing party shall be entitled to recovery of costs.
3. Force Majeure: Neither party shall be liable for any failure to perform due to causes beyond its reasonable control, including acts of God, war, or government regulation, provided the affected party gives prompt notice to the other.
4. Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
5. Entire Agreement: This document constitutes the entire agreement between the Parties and supersedes all prior discussions, understandings, or agreements, whether written or oral.

6. FORMAL EXECUTION

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

[Company Name]

Signature: ___________________________ Name: _______________________________ Title: ________________________________ Date: ________________________________

[Counterparty Name]

Signature: ___________________________ Name: _______________________________ Title: ________________________________ Date: ________________________________