What is a payment schedule?
A payment schedule is a plan outlining when payments are due and the amount that needs to be paid by payment period. For example, you might share a payment schedule template with a contractor, investor, or creditor to arrive at a timeline together.
Types of payment schedule templates
Payment schedules are commonly used in various contexts, including loans, mortgages, contracts, and construction projects. Some common types of payment schedule include:
- Loan payment schedule template: In the case of a loan or mortgage, a loan payment schedule template typically breaks down the repayment into equal or varying installments over a specified period. It specifies the principal amount, interest rate, and repayment frequency (monthly, quarterly, etc.). Payment details in a loan payment schedule help borrowers understand their obligations and budget accordingly.
- Bill payment schedule template: This template is mostly used to organize utility bills a company incur every month, including water, phone, garbage collection, electricity, and more.
- Project payment schedule template: In freelance or contract agreements for services or goods, a project payment schedule may indicate the milestones or deliverables that trigger payments. It ensures that payments are made as the work progresses or specific conditions are met.
- Construction payment schedule template: In construction projects, a payment schedule outlines the agreed-upon amounts and dates for progress payments. These payments are usually linked to completion stages or specific project milestones, allowing contractors and subcontractors to manage their cash flow and expenses.
Payment schedule frequency
Payment periods in payment schedules can vary depending on the specific agreement or financial arrangement. Here are some common payment schedule frequencies:
- Annually: Payments are made once a year. This frequency is often used for annual fees, memberships, or property taxes.
- Semiannually: Payments are made twice a year. This frequency is less common.
Quarterly: Payments are made every three months. This frequency is often used for business taxes, some insurance premiums, and some investment dividends.
- Monthly: Payments are made once a month and it is the most favored by employers due to low processing costs. Monthly payment is a common frequency for loan repayments, rent, utility bills, and subscription services.
- Weekly: Payments are made once a week. This frequency is common with wage earners, freelancers, and contract workers. The downside to this payment frequency includes high processing costs.
- Biweekly: Payments are made every two weeks. This frequency is commonly used for payroll in many countries.
Why businesses should use a payment schedule template
Businesses can benefit from using a payment schedule template for several reasons:
- Consistency: A payment schedule template ensures that all payment schedules within the organization are clear, easy to understand, and follow a consistent structure.
- Time-saving: By using a pre-designed payment schedule template, businesses can save time and effort as they only need to input the specific details of each payment, such as amounts to be paid by payment period and due dates.
- Accuracy: A payment schedule template helps minimize errors in payment calculations or due dates.
- Communication: Payment schedules often involve multiple parties, such as clients, customers, suppliers, or contractors. The template can be shared electronically or printed, ensuring that all stakeholders have a clear understanding of the payment obligations and deadlines.
How do I create a payment schedule?
Here’s how to prepare a monthly payment schedule template in Excel:
Step 1: Download payment schedule Excel template.
Step 2: Enter the name of your contractors or vendors.
Step 3: Enter a description of the service or product being provided.
Step 4: Enter the total amount agreed upon for a 12 month period with the vendor or contractor.
Step 5: Enter the monthly budgeted amount for each vendor or contractor.
You can find more detailed instructions on how to use our payment schedule template upon download.
What is the purpose of a payment schedule?
Internally, teams will use a payment schedule to help plan and budget for expenses related to contractors, investors, creditors, or vendors. When evaluating a new contract, it is helpful to understand your monthly cash flow by using a payment schedule. Our free payment schedule template is a great place to get started in keeping track of payment obligations.
What information does a payment schedule template include?
A payment schedule template typically includes the following information:
- Name of your contractors or vendors
- Descriptions of the services or products being provided
- Total amount agreed upon with the vendor or contractor
- Total amount due date
- First payment
- Last payment
- Budgeted amount for each vendor or contractor by payment period
- Payment method (optional, but recommended)
- Progress of payments / Payment history
How do I create a payment schedule in Google Sheets?
Yes, download our payment schedule Excel template. Then in Google Sheets, follow these steps:
- Create a new or open an existing spreadsheet.
- Click File. Import.
- Choose the Excel payment schedule template file and click Select.
- Choose an import location option:
Create new spreadsheet,
Insert new sheet(s),
or Replace spreadsheet.
- Click Import data and you should have this payment schedule template in Google Sheets.
Is this a printable payment schedule template?
This Excel payment schedule template was created to be used electronically, but it can be printed if preferred.
Download this template for additional instructions.