Reading Time
4 min.

How to draw up a payment schedule in 7 steps + Free sample letter!

When your customer can’t pay your invoice in full but still wants to pay you, they may propose a payment arrangement. This means they will pay your outstanding invoice in parts over a set amount of time. As a creditor, you are not obliged to make, or agree, a payment arrangement with your customer. But there may be situations where it makes sense to make a payment arrangement.

So, how do you make a good payment arrangement with your customer? Follow the 4 step-by-step plan outlined below by our collection specialists.

Step 1: Have your client come up with the initiative

Our advice is to always have your customer submit a payment proposal if he cannot pay the invoice in full immediately. Do not take the initiative for a payment arrangement yourself as soon as you notice that your customer cannot pay the invoice. If you show that you can very easily move away from the current payment agreements, this may give your customer the impression that you are not taking payment of the invoice very seriously.

Step 2: What is feasible for your own organisation?

If you agree to a payment arrangement, the payment will be delayed meaning you will have to bear these costs. There will be more administration work to do, which of course, will entail more costs. In addition, you have to deal with any interest costs you may need to pay. You will also need to swallow any initial costs that came with making the delivery and supplying the goods or services. Always check if this is feasible for your organisation before agreeing. After all, you are not obliged to make, or agree to, a payment arrangement with your customer.

Step 3: Check the creditworthiness of your customer

Before you agree on a payment arrangement, it is advisable to check the creditworthiness of your customer. It is possible that your customer's financial situation is so bad that there is no point in making a payment arrangement. If a payment arrangement does make sense: then assess what is feasible for your debtor.

Step 4: Create a concrete payment schedule

Make clear, concrete agreements about the payment schedule that are realistic for both parties:

  • What amount should be paid?
  • How many instalments should you agree on and what payment dates work you? Our advice is to keep the payment schedule as short as possible and to use as few instalments as possible. The longer the arrangement, the greater the risk that your debtor will not comply with the arrangement.
  • What interest is charged on the repayment term? If you so chose to, you can add interest to your payment schedule. This should’ve been outlined already in your contract or general terms and conditions. However, it is important to bear in mind that if your customer is already struggling to pay you, adding additional costs may make it even harder for your customer to pay you.
  • What are the consequences of non-payment? What should you do if your payment arrangement is not adhered to? You should make it clear, then any default on, or non-compliance with, the payment arrangement will result in the invoice being immediately payable in full. This means that you can take legal action immediately. In addition, we recommend that you also specify the collection costs that your debtor will have to pay if they do not comply with the arrangement.

Step 5: Record the payment agreement in writing

Make sure that any agreements concerning the payment schedule are recorded in writing. Have the debtor sign this arrangement as well. This will prevent discussions about the payment schedule at a later stage. Are large amounts involved? In that case, it is best to record the payment arrangements in a notarial deed.

Step 6: Follow up on agreements

When you agree a payment arrangement with your customer, you’re helping your customer to manage their debt and responsibilities. However, you are not obliged to accept their payment arrangement, especially if other arrangements have been made previously and have not been stuck to. It’s important to make sure that these new agreements are complied with. Keep a close eye on the new payment terms and take immediate action if payment is not made on time. This will prevent the payment of the invoice from becoming an endless process.

Step 7: Call in a debt recovery specialist

What if your business partner does not adhere to payment agreements? You have already accommodated to your debtor with the payment arrangements. Is your debtor still not paying? This means it's time to call in the help of an external party to recover the debt for you.

Make use of the help of a debt recovery specialist or a debt recovery lawyer. We recommend working with debt recovery lawyers, since they have more means to put pressure on a debtor. Working with a debt recovery lawyer usually has a positive effect, resulting in rapid payment of outstanding invoices and often in one go.

Send us your case before 16:00pm and we'll get to work immediately!

We are experts in recovering debt

  • Succesfully recovering debt since 1952
  • Always honest and clear advice
  • Specialist laywers in international debt recovery
  • Every year we collect thousands of outstanding invoices

Specialists in International Debt Collection

Our 35 international lawyers are specialists in debt collection across Europe. From the moment that you hand your case over to us, we will do our utmost to resolve the matter as soon as possible. Whether this concerns a straightforward debt recovery matter or a complicated legal conflict, we will unburden you.

Want to know more about international debt collection?

You can find more comprehensive information about international debt collection in our knowledge bank.

Still in need of some advice? Contact us today. Our international debt collection specialists and lawyers will be happy to help.

Advice without obligation?

Yes, I agree with the Privacy statement

Our Clients

We work for SMEs and Large Corporations.