Plaen | Process money with context

Understanding payment terms

Payment terms specify when your client should pay the invoice. The right terms balance your cash flow needs with client convenience and relationship management.

Common payment terms

Due Immediately

Payment expected upon receipt of invoice

Best for: Small amounts, trusted clients, digital services

Net 15

Payment due within 15 days of invoice date

Best for: Small to medium projects, regular clients

Net 30

Payment due within 30 days of invoice date

Best for: Large projects, corporate clients, standard business practice

Custom Date

Specific calendar date agreed upon with client

Best for: Milestone payments, specific project deadlines

Setting due dates in Plaen

Default payment terms

Go to Settings → Invoice Preferences
Select your preferred default payment terms
This will apply to all new invoices automatically
You can override defaults for individual invoices

Per-invoice customization

While creating an invoice, you can:

Choose from preset terms (Due immediately, Net 15, Net 30, Net 60)
Select a custom due date from the calendar
Set different terms for different clients
Add payment term notes or conditions

Choosing the right terms

Factors to consider

Project size and value

Small projects (< GHS 1,000): Due immediately or Net 15
Medium projects (GHS 1,000-10,000): Net 15 to Net 30
Large projects (> GHS 10,000): Net 30 or milestone payments

Client relationship

New clients: Shorter terms or upfront payment
Trusted clients: Standard Net 30 terms
Long-term clients: Flexible terms based on history

Industry standards

Creative services: Often Net 15 to Net 30
Consulting: Usually Net 30
Digital products: Due immediately or Net 15
Corporate work: Net 30 to Net 60

Payment term examples

Scenario-based recommendations

Freelance Logo Design

Project: GHS 2,500 logo design for local business
Recommended terms: Net 15
Reasoning: Medium-sized project, allows client time to process, maintains cash flow

Corporate Website

Project: GHS 15,000 website for corporation
Recommended terms: Net 30 with 50% upfront
Reasoning: Large amount, corporate approval processes, risk mitigation

Monthly Retainer

Project: GHS 3,000/month marketing services
Recommended terms: Due immediately (recurring)
Reasoning: Ongoing relationship, predictable income, services provided monthly

Advanced payment strategies

Early payment incentives

Encourage faster payment with discounts:

2/10 Net 30: 2% discount if paid within 10 days, otherwise Net 30
Early bird special: 5% off for same-day payment
Cash discount: 3% off for mobile money payments

Milestone payments

For large projects, break payments into phases:

50/50 split: 50% upfront, 50% on completion
33/33/34 split: Start, middle, completion
Weekly milestones: Payment per completed deliverable

Progressive terms

Adjust terms based on client payment history:

New clients: Net 15 or upfront payment
After 3 invoices paid on time: Upgrade to Net 30
Long-term clients: Flexible terms or Net 45

Managing overdue payments

Grace period

Consider a short grace period before marking invoices overdue:

2-3 days for processing delays
Account for weekends and holidays
Banking delays for international payments

Late payment consequences

Late fees: 2-5% monthly on overdue amounts
Service suspension: Pause work on overdue accounts
Collection process: Formal collection procedures
Credit terms adjustment: Shorter terms for future invoices

Legal considerations

Clear terms: State payment terms clearly on invoices
Late fees: Specify late payment charges upfront
Interest rates: Follow Ghana's legal limits for interest
Contract alignment: Ensure invoice terms match contracts

Best practices

Be consistent: Use similar terms for similar clients
Communicate clearly: Discuss terms before starting work
Document agreements: Put payment terms in writing
Monitor performance: Track which terms work best
Stay flexible: Adjust terms based on experience

Setting due dates and terms