Last editedJan 20222 min read
A payment schedule refers to the dates at which payments will be made from one individual or body to another. This may be a repayment schedule for a loan, or a predetermined schedule of payment in exchange for freelance services.
In this post, we’ll define what exactly is meant by a payment schedule and take you through how to approach organising a freelance payment schedule.
What is a payment schedule?
As already outlined, a payment schedule is a pre-agreed schedule of payments made at a certain intervals and frequencies between one party to another.
When you make an investment on a purchase, for example, a mortgage for a new home, you will make monthly payments until the mortgage is paid off.
As a contractor, you will arrange with your client the frequency of payment for your services in a freelance payment schedule.
Parameterised and customised payment schedules
There are two types of payment schedules: parameterised and customised.
A parameterised schedule is fixed by market conventions and rules. The parameters include payment frequency (i.e. weekly, monthly, bi-annually, annually), payment day (i.e. first Monday of the month, every Friday, etc.), date rolling (to adjust payment date when it does not fall on a business day), date of first payment, date of last payment (also known as maturity date).
A customised payment schedule consists of a sequence of dates fixed and agreed by relevant parties determining when payments will be made. A good example of this is a UK student loan agreement, whereby three dates are set in a year for when a student will receive an instalment of their loan.
As for what scheduled payment means, it’s simple - it refers to individual payments scheduled for a specific date.
Payment schedule template
Payment schedule templates are available on Word and Excel, as well as other software. The schedule should include dates of payment, payment amounts and recipient information.
A payment schedule example for student finance includes columns for: academic year of study, instalment (first, second, etc.), date, product, payee, amount, method of payment (e.g. direct debit) and status.
Payment schedule formats will change depending on whether they are parametrised or customised. A payment schedule format will also differ depending on what product or service is being offered.
Freelance payment schedule
As a freelancer, one of the biggest issues is getting paid. This is because a variable income can make it hard to organise your finances. One of the best ways to tackle this is by organising a payment schedule.
Having a freelance payment schedule will help you keep your cash flow in check. In order to do this, you will need to first decide how frequently you want to be paid by a client. This might be bi-weekly, weekly, or monthly. If you are only providing services once or twice weekly, then monthly tends to be the most appropriate frequency of payment. However, if you are delivering work daily, then you may prefer weekly payments.
When it comes to one-off projects, it’s advisable that you create a payment schedule which breaks down the payment into three or four instalments. This can help balance out your cash flow as you complete the project.
When working with large, corporate clients, however, you should be aware that it is unlikely that you will be able to determine your own payment schedule. Often these clients pay up front or issue their own payment schedule.
Making payments with GoCardless
If your payment schedule requires you to make payments at intervals, it’s simple and easy to set them up with GoCardless. We offer a direct debit solution that is ideal for recurring payments. GoCardless also provides Instant Bank Pay, which is perfect for one-off, same-day payments like deposits.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.