# Payment-Terms Templates

A business with steady demand and a cash crunch almost always has a terms problem, not a sales problem. You are funding your customers' operations with your own payroll, because the terms let you. These five clauses move the money back to your side of the timeline: you collect earlier, in pieces, with a reason to pay fast and a cost to paying slow.

Each clause below is written twice: a template with bracketed fields you set, and a filled example from Copperline Mechanical so you see real numbers. Read them as plain-language starting points, not finished contract language. The dollar amounts and percentages are illustrations, and every one of these terms belongs in front of a licensed attorney before it goes on a real invoice or contract, because enforceability, late-fee caps, and lien rights are set by your state and your contract.

Put these on the estimate and the signed work order, not just the invoice. A term the customer agreed to before the work started collects; a term that appears for the first time on the bill argues.

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## 1 · Deposit up front

**What it does:** collects a share of the job before you buy materials or send a crew, so the customer funds the work instead of your operating account. Use it on any job over a threshold you set, for example any job above $1,500.

**Template:**

> A deposit of [percent, e.g. 40%] of the estimated total is due before work is scheduled. Work begins once the deposit is received. The deposit is applied to the final invoice and is [refundable / non-refundable per the terms below].

**Filled example (Copperline Mechanical):**

> A deposit of 40% of the estimated total is due before work is scheduled. On this $8,000 rooftop unit replacement, the deposit is $3,200, due at signing, and is applied to the final invoice. Work is scheduled within 5 business days of the deposit clearing.

A 40 percent deposit on a $8,000 job puts $3,200 in your account before you spend a dollar on the unit. Have your attorney confirm your deposit and refund language for your state.

## 2 · Progress billing

**What it does:** bills a long or large job in stages tied to milestones, so you are paid along the way instead of 45 days after the last day. Use it on any job that runs more than about two weeks or over a dollar line you set, for example $10,000.

**Template:**

> This project is billed in progress payments: [percent] at [milestone], [percent] at [milestone], and the remaining [percent] within [net terms] of completion. Each progress invoice is due [net terms] from its issue date.

**Filled example (Copperline Mechanical):**

> This $24,000 tenant build-out is billed in three progress payments: 40% ($9,600) at contract signing, 40% ($9,600) at rough-in inspection, and 20% ($4,800) due net-15 from substantial completion. Each progress invoice is due within 15 days of issue.

On a $24,000 job, progress billing means you are never carrying more than $9,600 of unpaid labor and materials at once, instead of the full $24,000. Have your attorney align the milestones with your contract and any lien deadlines.

## 3 · Due on receipt

**What it does:** removes the 30-day float by making the invoice payable when it lands, which is the right default for smaller jobs and any new customer without established credit. Use it as your standard term below a size you set, for example under $2,500.

**Template:**

> Payment is due upon receipt of this invoice. Accepted methods: [card, ACH, check]. A card on file may be charged on the invoice date unless other arrangements are made in writing.

**Filled example (Copperline Mechanical):**

> Payment is due upon receipt. This $1,850 emergency water-heater replacement was authorized with a card on file, which will be charged the day the invoice issues. A receipt is emailed automatically.

Moving your under-$2,500 work from net-30 to due-on-receipt with a card on file can pull two to three weeks of float out of every one of those jobs. Confirm card-on-file authorization language with your attorney and your payment processor.

## 4 · Early-pay incentive

**What it does:** pays the customer a small discount to pay you fast, which is cheap money when the alternative is waiting 45 days or borrowing on a line of credit. The common form is "2/10 net 30": 2 percent off if paid within 10 days, otherwise the full amount at 30.

**Template:**

> Terms: [discount]/[discount window] net [full term]. A [percent] discount applies if the invoice is paid within [number] days; otherwise the full balance is due within [number] days.

**Filled example (Copperline Mechanical):**

> Terms: 2/10 net 30. Pay invoice #2074 for $8,800 within 10 days and take a 2% discount ($176), paying $8,624; otherwise the full $8,800 is due within 30 days.

A 2 percent discount to get paid 20 days early works out to about a 37 percent annual rate, which sounds expensive until you compare it to a 60-day invoice you cannot collect and a payroll you have to fund anyway. Ask your CPA whether the discount math fits your margins before you offer it as standard.

## 5 · Late-fee clause

**What it does:** puts a cost on paying you late, so your invoice stops being the cheapest loan the customer has. It also gives your day-45 call and your day-35 email a fact to cite instead of a complaint.

**Template:**

> Invoices not paid within [net terms] accrue a late charge of [percent] per month ([annual rate] annual) on the unpaid balance until paid. The customer is responsible for reasonable costs of collection, including attorney fees, to the extent permitted by law.

**Filled example (Copperline Mechanical):**

> Invoices not paid within 15 days accrue a late charge of 1.5% per month (18% annual) on the unpaid balance. On a $4,600 balance, that is $69 for the first month. The customer is responsible for reasonable collection costs as permitted by law.

The late fee only works if it is on the signed work order and it is legal in your state, because several states cap the monthly rate and some limit collection-cost recovery. This clause in particular is one to set with your attorney, not from a template.

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<div class="disclaimer">
<strong>Plain terms:</strong> this is general business education, not legal, accounting, or tax advice, and it makes no promise about your results. These clauses are illustrative starting points, and the dollar amounts and percentages are examples, not recommendations for your business. Payment terms, late-fee limits, deposit and refund rules, card-on-file authorization, and lien and collection rights are governed by your contract and your state's law. Before any of this language goes on a real estimate, work order, or invoice, have it reviewed and set by a licensed attorney who knows your state, and confirm the discount and fee math with your CPA.
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