Schedule A (Payment Terms) (Can/UK/Aus)

This payment schedule provides a practical framework for establishing clear payment terms in commercial transactions. It sets clear expectations, reduces misunderstandings, and improves cash flow by stating when customers pay, what is owed, and the consequences of late payment. Businesses can adopt the option that best fits their sector and operations, then communicate those terms upfront to minimize disputes and risk.

The schedule offers three core structures. A milestone model can require a substantial advance at execution, a split into thirds tied to an agreed payment date at key milestones, or an hourly arrangement with a stated cap (Maximum Billing Amount). In all forms, out-of-pocket expenses for goods or services, such as license fees, outsourced services, shipping, domain registration, host costs, hardware and software, travel, and even film and developing, are reimbursable.

Invoices are due within 15 days of the invoice date. If a customer fails to pay by the due date, unpaid balances accrue interest at 1. 5% per month, a common approach to charging interest on commercial debts. Clear terms around scope changes are included: if the customer requests changes, extra time is billed at the hourly rate, and yearly maintenance figures are estimates only.

Accepted payment methods can include a credit card authorization plan, with charges applied as each milestone is delivered and accepted. Many organizations also permit bank transfer, cheque, cash, or online sales payments; if using bank transfers, include account details such as account number and sort code. For international payments and international transfers, consider currency conversion, exchange rates, and regulatory requirements to ensure compliance and convenient international payments for overseas customers. When collecting financial information, follow reasonable security practices and applicable rules and legislation.

Use cases include software and technology projects, construction contractors delivering phased work, consulting or consultancy engagements with milestones, and government contracts where compliance, transparency, and prompt payment are vital. Small businesses can benefit by setting different terms that are expressly agreed and not grossly unfair, perhaps negotiating early payment strategies or a small discount where appropriate. Clear communication about delivery, receipts, potential delays, and obligations helps avoid confusion and payment issues that can arise in the normal course of trading.

Proposal Kit helps teams outline and set payment terms smartly. Its document assembly, automated line-item quoting, AI Writer for supporting documents, and extensive template library make it easier to tailor provisions, align payment details with the process, and save time while enhancing clarity.

Beyond defining milestones and expenses, strong payment language supports timely payments and gives each party the confidence to operate on its own payment terms. Specify the payment method options and the receipt process, and inform customers what to expect if they request changes. Clear communications, internal monitoring, and a brief report schedule reduce hassle and save resources.

State who is responsible for acting on behalf of the supplier for invoicing and how funds are applied, including any net period for settlement. When selling into a dynamic market, anticipate what may happen under different circumstances and outline the means to negotiate adjustments, while keeping terms in accordance with the contract and not publicly disclosing prohibited financial information.

Legal considerations include how the contract addresses non-payment, penalties, statutory interest, and demand notices for overdue debt. Some businesses reference a base rate (for example, an England base rate) as part of an interest formula; others use a fixed monthly rate. Either approach should be clear about when charges start, how they are calculated, and whether they can be amended.

Address whether guarantees are required, how tax is handled, and what income is covered by the payment schedule. State that parties will assess risks, appeal to the contract's remedies before escalation, and document any changes via a signed form.

Proposal Kit helps organizations create smart payment schedules tailored to the sector, whether for an Australian business, consulting supplier, or a company selling software. Teams can assemble documents, set strategy, and negotiate terms using templates, automated line-item quoting, and the AI Writer to write consistent clauses and related documents. This improves the likelihood of prompt payment by making parties aware of obligations, clarifying process steps on behalf of both sides, and strengthening the relationship through clear, well-structured terms.

For larger or higher-risk engagements, consider additional safeguards that protect delivery and cash flow. Require proof of a customer's ability to pay (credit checks, trade references) and, where appropriate, a deposit, escrow arrangement, letter of credit, or a bank or parent-company guarantee. Define milestone acceptance criteria and sign-off steps so payments track demonstrable outcomes, not vague progress. Use retention or holdbacks tied to final acceptance to align incentives without starving the project of money needed for execution.

Vendors should also plan operationally: ring-fence funds for subcontractors and materials, maintain a reserve for tax obligations, and schedule capacity so the team's ability to perform matches the timeline. Add a simple dispute and cure-period ladder to resolve issues quickly before they endanger delivery or payment. Finally, specify what data the parties will share (status reports, burn rates) so both sides can anticipate variances early and adjust scope, timing, or guarantees with minimal disruption.

How to write my Schedule A (Payment Terms) (Can/UK/Aus) document - The Narrative

How to Build a Legal Contract with Proposal Kit

This video illustrates how to create a legal contract using the Proposal Pack Wizard software. It also shows how to create a proposal with an invoice and contract at the same time.