Last Updated on July 11, 2025 | 9 : 01 pm by Fiestasline
You’ve booked a client, agreed on services, and started the work — but how and when do you get paid?
Without clear payment terms, even the most talented freelancers and service providers can run into major issues: delayed payments, refund disputes, awkward money conversations, and even non-payment.
That’s why setting payment terms isn’t just a formality — it’s a foundational part of your business.
In this guide, you’ll learn how to:
- Set clear and fair payment terms
- Protect yourself from non-payment
- Choose the right payment schedule for your service
- Communicate expectations with clients
- Handle late payments or cancellations with confidence
Whether you’re a balloon decorator, event planner, photographer, designer, or any service provider — these tips will help you get paid on time and in full.
1. What Are Payment Terms?
Payment terms are the conditions you and your client agree on for how much is owed, when it’s due, and how it should be paid.
They typically include:
- Total price and deposit amount
- Payment schedule or due dates
- Accepted payment methods
- Refund or cancellation policies
- Late fees or penalties
Payment terms should be included in every written agreement or contract — never rely on verbal understanding.
2. Why Clear Payment Terms Matter
Without clear terms:
- Clients may delay payment without technically “breaking” the agreement
- You may not know when to invoice or follow up
- Disputes over pricing, timing, or refunds become much harder to resolve
- Your income becomes unpredictable
Good payment terms protect you, set professional boundaries, and reduce awkward money conversations down the line.
3. Decide on a Payment Schedule
Choose a schedule that matches your workflow, time commitment, and risk level. Here are common options for service providers:
Option 1: 50/50 Split
- 50% upfront (non-refundable deposit)
- 50% due before event or final delivery
Best for: Event services, balloon décor, freelance design, photography
Why it works: Locks in commitment early while ensuring you’re fully paid before delivery.
Option 2: Milestone Payments
- Payments split into 2–4 parts based on project phases (e.g., start, mid-point, final delivery)
Best for: Large creative projects or multi-stage services (like branding or coaching)
Option 3: Full Upfront Payment
- 100% paid in advance
Best for: Small, fixed-scope services or rush jobs
Pro tip: Offer a small discount (e.g., 5%) as an incentive for full prepayment.
Option 4: Hourly or Weekly Invoicing
- Time-based invoicing for longer or flexible projects
Best for: Ongoing work, retainers, or consulting
Always agree on minimums, expected hours, and frequency.
4. Define Your Deposit Policy
A non-refundable deposit shows your client is serious and protects you from last-minute cancellations.
Common terms:
- Amount: 25–50% of the total
- Due: At the time of booking
- Non-refundable: Regardless of project cancellation or change
Example Contract Clause:
“A non-refundable deposit of 50% is due upon signing this agreement. Work will not begin until deposit is received. The remaining balance is due no later than 48 hours before the scheduled event.”
5. Set a Clear Due Date for Final Payment
Always specify exactly when the final payment is due — not just “before the event.”
Use:
- “Due on [date]” or
- “No later than 48 hours before delivery/event”
Never allow payment after the event unless the client is an established, recurring customer.
6. Offer Clear and Limited Payment Methods
State exactly how you accept payments:
- Bank transfer
- Credit card (via Stripe, Square, etc.)
- PayPal, Venmo Business
- Cash or check (only if you’re comfortable)
Avoid casual payment apps like Zelle or Cash App unless you’ve verified business protection options.
Example:
“Accepted payment methods include Stripe, PayPal, and direct bank transfer. Cash payments must be delivered in person. Payment is not considered received until cleared.”
7. Set Late Fees (And Stick to Them)
Late fees encourage timely payment and show that you take your time seriously.
Typical terms:
- 5–10% late fee after due date
- Daily or weekly penalties if unpaid
- Cancellation if not paid by a final cutoff
Example Clause:
“A 10% late fee will be applied to any payment not received within 24 hours of the due date. Services may be canceled if full payment is not received within 72 hours of the event.”
Send friendly reminders 1–2 days before the due date and again immediately after if payment is late.
8. Include a Cancellation & Refund Policy
Payment terms are closely tied to your cancellation policy.
Include:
- How cancellations affect refund eligibility
- Whether deposits or partial payments are refundable
- What happens if you cancel (due to illness, emergency, etc.)
Example Clause:
“Cancellations made more than 14 days in advance are eligible for a partial refund, minus the deposit. Cancellations within 14 days of the event are non-refundable.”
9. Communicate Payment Terms Clearly
Never assume clients read every line of your contract.
- Highlight payment terms in bold or shaded boxes
- Include them in your invoices, confirmation emails, and client welcome guides
- Discuss them during onboarding calls or emails
- Remind clients when payments are coming up
Consistency builds trust and sets the expectation that you run a real business.
10. Use Invoicing Tools to Stay Organized
Use invoicing platforms that allow automatic reminders, digital contracts, and payment tracking. Popular tools include:
- HoneyBook – Great for creatives and event pros
- Dubsado – Excellent for automation and proposals
- QuickBooks Self-Employed – Ideal for freelancers with bookkeeping
- Square or Stripe – Simple, flexible payment processing
- Wave – Free and user-friendly for small service providers
Always make it easy for clients to pay — no friction, no delays.
Conclusion
Setting clear, professional payment terms protects your income, prevents misunderstandings, and ensures you’re paid for your time and expertise.
To recap:
- Require a deposit (and make it non-refundable)
- Choose a payment schedule that aligns with your workflow
- Be crystal clear about due dates and late fees
- Put everything in writing — and get signatures
- Follow up consistently and professionally
You’re not just delivering a service — you’re running a business. When you set strong payment terms, clients take you (and your time) seriously.
Need help writing your payment terms or contract?
👉 [Download Our Payment Policy Template Pack]
or
📩 [Book a Free 15-Minute Contract Review Call]
Sources & References
- U.S. Small Business Administration – https://www.sba.gov
- Wave Accounting: Setting Payment Terms – https://www.waveapps.com
- HoneyBook: Client Payment Best Practices – https://www.honeybook.com/blog/payment-terms
- LegalZoom: Service Contract Guide – https://www.legalzoom.com
- QuickBooks: How to Write an Invoice – https://quickbooks.intuit.com
