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This payment plan agreement is written for businesses offering instalments to a customer, not for personal loans. It records the balance and the invoices it covers, the deposit, the instalment schedule, autopay authority, and exactly what happens if a payment is missed. Download it free below in Word or PDF, no email required, then walk through every clause so you know what you are signing people up to.
Three documents cover the whole arrangement. Fill in the bracketed fields, have your lawyer sanity-check anything sizeable, and keep a signed copy with the invoice.
Search this term and the results are loan documents: a Debtor acknowledges owing a Creditor, with clauses about collateral and promissory notes. Fine for lending a mate $5,000. Wrong shape for a business that has invoiced a customer and agreed to spread the payment, which is who actually needs this page.
This agreement starts from the invoice. The parties are a Business and a Customer, the balance is tied to invoice numbers and original due dates, the deposit is the first instalment, and the payment method clause assumes autopay because arrangements that rely on the customer remembering to pay have a short life expectancy. It also assumes something no template site mentions: a document only works if something enforces it afterwards. Every clause here maps to a thing your AR process can actually do, remind, charge, apply a fee, accelerate.
Ten clauses, each earning its place. Copy the wording, adapt the bracketed parts, delete nothing until you know why it is there.
The Customer acknowledges owing the Business the total of [AMOUNT] under invoice(s) [NUMBERS] dated [DATES], confirms the underlying goods or services were delivered as agreed, and raises no dispute over the Balance.
The Customer will pay a deposit of [AMOUNT] ([%] of the Balance) on signing this Agreement. The deposit is the first instalment under the Schedule.
The Customer will pay the remaining Balance in the instalments set out in the Schedule. Time is of the essence for each payment date.
Payments will be collected automatically by [card / direct debit] under the authority signed with this Agreement. The Customer will keep a valid payment method on file for the life of the Schedule.
If an instalment fails or is not paid on its date, the Business may charge a late fee of [AMOUNT] and interest at [RATE] on the overdue amount, and may re-attempt collection.
If an instalment remains unpaid [7] days after its date, the Customer is in default and the whole remaining Balance, plus accrued fees and interest, becomes immediately due and payable without further notice.
The Customer will reimburse the Business for reasonable costs of recovery, including collection agency fees and legal costs, to the extent permitted by law. Accepting a late or partial payment does not waive the Business's rights or vary the Schedule. This Agreement is a payment arrangement, not a settlement, release, or novation.
Enter the numbers, get the table, paste it into clause 3. The running balance column is what makes the schedule auditable at a glance.
| Date | Amount | Running balance |
|---|
One distinction no template site mentions. Under US Truth in Lending rules, a business that regularly extends credit to consumers, payable in more than four instalments or carrying a finance charge, can meet the definition of a creditor under Regulation Z, with formal disclosure obligations to match. "Regularly" has a specific meaning (broadly, more than 25 such extensions in the preceding year), and business-purpose credit is exempt.
The practical read: B2B payment plans on invoices sit outside this regime. If your customers are consumers and instalment plans are part of how you sell, keep plans to four payments or fewer, or get proper advice before scaling the programme. Australia runs a similar split: the National Credit Code covers credit for personal and household purposes, while business-purpose arrangements generally sit outside it. Not legal advice, just the map of which lane you are in.
Here is what happens to most signed payment plans: they get filed, the first instalment arrives, the third one quietly does not, and nobody notices until month end. The agreement gave you rights; nothing exercised them.
That second half is what Paidnice does. Set the plan up on the actual invoice in Xero or QuickBooks and the schedule is written onto the invoice and the customer PDF, instalments auto-charge through Stripe or Pinch Payments under the authority you just collected, reminders run before and after every instalment, and a missed one triggers your late fee instead of your memory. Deposits work as the first instalment, any frequency works, and uneven amounts (weekly payments with a final settlement) are fine. Plans are included on Pro plans from US$99 a month, and customers cut their average wait for payment in half within 30 days. The payment plans feature page has the two-minute tour, and the payment plan calculator models amortisation and interest if you charge it.
Name both parties and the invoices, state the balance with an acknowledgment that it is owed, set a deposit (20 to 30% is the norm for overdue balances), lay out every instalment date and amount in a table, attach autopay authority, keep late fees and interest live on misses, add acceleration on default with a short cure window, and have both parties sign before the first payment date.
Yes. It is an ordinary contract: offer, acceptance, and consideration on both sides (you give time, they commit to a schedule). The acknowledgment clause also strengthens your position on the underlying debt if you ever need to enforce it. For large balances or consumer customers, have a lawyer review the wording for your jurisdiction.
Usually not; signatures are enough for an ordinary commercial arrangement. Some businesses notarise very large balances as belt and braces, and some US states have specific requirements in consumer contexts, which is a question for your lawyer rather than a template.
20 to 30% for an arrangement on an overdue balance, and up to 50% when the plan is agreed before work starts. The deposit tests commitment and caps your downside. A customer who cannot fund any deposit is asking for unsecured credit, not a payment plan.
Generally yes for business customers, at your contractual rate: in the UK statutory interest of 8% plus the Bank of England base rate applies to late commercial payments regardless, in the US contract rates around 1 to 2% per month are typical subject to state caps, and in Australia and New Zealand the written clause is what creates the right. Consumer plans can trigger credit regulation; see the section above.
This guide is part of a set on customer payment plans. Each piece stands alone; together they cover the whole system.
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