Promise to Pay

What is a promise to pay?

A promise to pay (PTP) is a customer's commitment to pay a specific overdue business invoice, or part of it, on a named date. In business-to-business receivables the promise is made by phone, email, text or from a customer portal, usually in reply to a reminder or a call. It is not the consumer phone or utility "promise to pay" arrangement.

The promise matters because it changes what the seller does next. A reminder schedule that keeps running after a customer has given a date reads as if nobody listened, so the seller pauses the schedule until that date and records the promise.

What does a promise to pay include?

A usable promise to pay names four things: the invoice, the amount, the date, and who made the promise and how.

• The invoice. The number, or the statement balance if the promise covers several.
• The amount. The full balance, or the part the customer has committed to.
• The date. One calendar date. "Soon", "next week" and "after month end" are not promises, because there is no day on which they can be missed.
• Who and how. The person's name and whether it came by phone, email, text or the portal, so the follow-up goes back the same way.

For larger invoices, confirm the promise in writing. The promise to pay agreement and letter template covers the wording.

What is the difference between a promise to pay and a payment plan?

A promise to pay covers one date for one amount, and a payment plan splits the balance into several dated installments. A promise fits when the customer can pay in full and the only question is when. A payment plan fits when they cannot, and each installment carries its own date. A missed installment is a broken payment arrangement.

Is a promise to pay legally binding?

Whether a promise to pay is legally binding depends on where you are and how it was made, and the invoice and your payment terms still apply. The promise to pay agreement template covers what makes one enforceable. Ask a lawyer before relying on a promise. This is general information, not legal advice.

What is a broken promise to pay?

A broken promise to pay is a promised date that passes, after any grace period the seller allows, without the money arriving. The right response is a short follow-up the next business day that names the invoice, the date and the amount, and asks for one new date. The guide on how to follow up on a broken promise to pay gives the messages and an escalation table.

How do you track a promise to pay?

Record the date, the amount and the owner against the invoice, and set the promised date as the expected payment date in your accounting system, so a missed date shows up on a report rather than in someone's memory. Give each invoice one owner, and log phone promises as carefully as written ones.

In Paidnice, customers can promise a date from the invoice page of the customer payment portal, and staff can record one from a call. Policies set to skip when a payment is promised wait until that date. When a promise is marked broken after the grace period, the invoice owner can get a Broken Payment Promise email and raise an escalation.

Related terms: Broken payment arrangements, Invoice query management, Dispute management, Collection policy.