Prompt Payment through Contracts

12 Aug

Man with pen, C2C Resource Commercial Debt CollectionNo matter how well you know and trust a customer, adding a contract to a project can make the payment process less of a headache. Not only will a written and signed agreement define each party’s obligations and expectations for the service or product, but it will save time and money in the long run.

Clear Terms

When writing the payment section of the contract, clearly spell out the terms so they cannot be misinterpreted. The less of a surprise it is, the more likely the customer will be able to pay promptly. If you need to brush up on payment terms, check out one of our past blogs on what the terms mean and if they are right for your business.

One example of a straight-forward approach is:

  • The first payment of 50% or (Enter 50% total) is due upon the signing of this contract.
  • The final payment of the balance is: (Fill in the blank: payable upon receipt of invoice, payable with NET30 terms, etc) upon receipt of invoice.
  • Payment must be made in the form of check or credit card (Visa, MasterCard).
  • A late fee of 3% will be applied to the balance after 30 days of delinquency.

Request Information

When conducting business with a company, always try to request contact information for two points of contact who are part of the accounts payable department. When businesses only request one point of contact, there is a small risk that the person could leave their position or be on vacation. By having the contact information in writing, it will eliminate trying to transcribe someone’s email address over the phone with the potential of writing it down wrong. This also nearly eliminates this common late payment excuse: the business does not have the right contact person.


By having the payment terms in a signed contract, delinquent customers cannot have too many excuses as to why the payment of their invoice is late; with a contract the invoice is not the first time they see the methods of payment and payment terms. And if the customer’s business is in trouble, they will most likely work to pay yours first since it is so clearly stated.

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