A contract is an intelligent business tool that protects all the parties involved. When drafting a business agreement, it’s important to include any services, payment details and project timelines within the contract. This way, if there are any questions, disputes or disagreements, the parties involved can refer to the contract schedule to see what was agreed upon when signing the agreement. It’s important to work with an attorney when drafting your contract.
Create a Payment Schedule Contract
A payment schedule contract outlines what the payment terms are between the parties involved. Not only does it specify how much is to be paid, it also outlines how the money should be paid, when it should be paid and whether payment is dependent on any actions.
For example, if your company is providing web design services to another company, the payment schedule contract may outline that 50 percent of the payment is due upon the signing of the contract, and 50 percent of the payment is due when the work is completed. The payment schedule should also outline how the money is to be sent, such as by check or online money transfer. Be sure to include the invoice terms, such as net 30, which means that the company to which you’re providing services has 30 days to pay you once they receive the invoice.
Your payment schedule contract should also outline what happens in the scenario when payment is not made promptly. Some businesses include clauses that state that they will start charging interest if payment is not made by the designated date. Some include clauses that state they will cease to complete the service if the payment is not made on time.
Establish a Deliverable or Service Schedule
Include a detailed list of services or deliverables in your business contract. Try to be as specific as possible so there are no questions about what is included with your services. Break out larger tasks into smaller sections so it’s clear which elements need to be finished in order for a deliverable to be considered complete.
Remember to include elements such as changes and feedback. Will you be providing the client with the opportunity to review each deliverable or service and recommend changes? If so, how many rounds of revisions will you allow, and what will be the scope of those revisions? If you’re sewing a custom dress, for example, will you make minor alterations, or will you consider a redesign in the feedback stage?
Provide Dates and Timelines
Specify when each deliverable or service will be completed and include milestones for each element. If you’re working on a large project, you may need to include dates for when 25 percent, 50 percent and 75 percent of the project will be complete in addition to the final project end date.
A contract schedule example for catering might include a date for when the menu will be decided and final, when the client will be able to do a tasting and when the client will receive the meal for the event. Depending on the services, you may also need to specify what time the food will arrive at the venue, what time it will be served and what time the dishes will be cleared away. Attach your detailed schedule to the agreement.
Always List Dependencies
In many cases, services or deliverables that you offer will depend on external and internal elements. External factors that may affect your schedule include delays on the client's end or not receiving materials from a partner on time. Internal factors may include illness or staffing issues. Provide a backup plan in your contract schedule in case of these situations.
Parts of your services or deliverables may affect other parts of the agreement. For example, if the contract is for baking a custom wedding cake, you will require the clients to select their flavor and design by a certain date. However, if the clients fail to do that in time, you may not have enough time to gather the ingredients. As a result, it’s necessary to ensure you build dependencies into your schedule.
Ensure Both Parties Agree to the Terms
Once you have outlined all the payment, service and schedule terms in the contract, review it with all parties involved and ensure everyone agrees to the terms. Have everyone sign at least two copies of the contract so that both the business and the client can have an original signed copy on hand.
- Always have an attorney draft -- or at least review -- all legal documents you will sign, including contracts and schedules.
Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.