As an artist it's important to craft a solid terms of service that protects you from abuse and satisfies your customers.

Policies to address:

* Policy TOS: Should be publicly displayed, clearly and carefully written, and provided to the customer to review and agree on before work has begun.
Make sure there are no unpleasant surprises in store for both parties.

* Payments: In most cases payments should be done ahead of time, either in full or half now, half on delivery.
An artist's reputation is on the line here; those who take payments but don't deliver stand to lose more than individual customers who take the art but don't pay up.
It's easier to make multiple identities and keep a low profile after stiffing an artist than it is to display and sell art in the same way.
Plus there are many more customers out there than artists, so documenting and reporting abusive customer incidents is much more difficult than the reverse.

* Edit policy: [By default] the artist has an obligation to make their best effort to correctly draw the character, and have a professional and courteous attitude about fixing the errors.
Note that this does not account for differences in style, nor should style be used as an excuse for making mistakes and refusing to fix them.
If you're one of those artists who deeply detests ever working on an image after it's "done", then you should make this very clear in your policy and make sure the customer understands and accepts it.
That said, there should be a reasonable limit on how many rounds of edits can be made to protect the artist from abuse.

* Posting: The artist should make sure the customer is OK with them posting the finished image, and have a policy in place if they don't want it posted (probably an extra fee depending on value).
Most artists prefer to post the art for various reasons and most customers are OK with it, but this shouldn't be automatically assumed.

* Tracking commissions: Artists should diligently keep a record of all their commissions in a single document (Excel, Google Docs or even a pad of paper)
Also keep track of the dates and be sure no one is left twisting in the wind.
I'm always flabbergasted when I see artists post journals asking for anyone who commissioned them to contact them... you really need to keep track of this stuff.

* Communication: This goes both ways. Both parties need to respond to each other within a reasonable time frame, even if there is no news.

* Satisfaction guarantees: It's a sign of good service to have these, but make sure it isn't ripe for abuse. Full refunds for dissatisfied customers might be fertile grounds for "free" commissions.
Work out a reasonable refund percentage, probably somewhere in the 25-50% range, and carefully vet the claims made. Cancel the policy if you suspect it's being abused.

* Refunds: This fandom shouldn't be used like an interest-free bank. Always be prepared to issue refunds at a moment's notice to all your customers if need be.
If you are unable to do so, perhaps FA isn't where you should be looking for emergency funds...

* Timeframe: The artist should be very clear about how long it will take and strive to deliver by that date. There should also be a policy for what happens if the artist is late on delivery.

These are my views, from my experience on both sides of the aisle. What are your opinions on good service for commissions?