Employees within a company or organization need to be paid for their services. For a large company, this involves keeping track of all the employees, their roles, salaries, and employment and payment dates. The best way to do this is to use a payment schedule template to prepare a running schedule that identifies when, how, and how much each employee should be paid.
What Is a Payment Schedule?
A payment schedule is a formal document that records the timings, amounts, and additional details of the payments that must be made by one entity to another. For example, a company payment schedule could identify the loan payments, monthly expenses, and employee salaries a company must meet either weekly, bi-weekly, monthly, or annually. This document ensures that no payments are late.
What Is a Payment Schedule Template?
A payment schedule template is a fillable model in which you can indicate the names, dates, and amounts involved in several payments within an organization, business, or company. It can be modified to fit different payment types, e.g., utilities, loans, wages, etc.
Why Is a Payment Schedule Template Important?
A payment schedule template maintains a current record of all payments, payment amounts, and dates. It is highly useful in companies with many employees and lending agencies that must manage loans at close intervals. Generally, an employer enters employee details into the template to ensure that everyone gets paid when they should. Next to the name, they identify the due amounts and dates.
Types of Payment Schedule Templates
Since there are multiple types of payments and payment periods, there are also several types of payment schedule templates to match. The following are the most common:
- Bill Payment – The bill payment schedule template is used to outline the amounts payable for a company’s monthly bills. It identifies the service or good provider, the amount, and its due date.
- Loan Payment – The loan payment schedule template is used by mortgage and credit companies to track due loan payments, the loanees, amounts, due interests, and dates.
- Project Payment – The project payment schedule template is used to capture the payments required to execute a project, as indicated in the contract.
- Construction Payment – The construction payment schedule template is used in the construction business to gauge project values against progression.
More payment schedules templates types include:
- Excel loan payment template
- Freelance payment schedule template
- Mortgage payment schedule payment
- Building contract payment schedule template
- Printable project payment template
Payment Schedule Templates & Examples
How to Calculate a Payment Schedule
Calculating and preparing a payment schedule requires an in-depth knowledge of your company, employee histories, and running bills. Once you have all these details, follow these steps:
Step 1: Identify Your Payment Commitments
Begin by noting down all the payment details your company is currently committed to, including employee salaries, overhead, utility payments, taxes, etc. For employee salaries, identify the employees by name and identify the date they joined the company as well as their employment amount and date.
Step 2: Outline the Payment Types
Once you capture all the companies and individuals your company is committed to paying, take into account important details like loan deductions, overtime, advances, social security deductions, discounts, applicable taxes, etc.
Step 3: Indicate the Payment Periods
Next, categorize the payments by when they should be made, i.e., daily, weekly, bi-weekly, monthly, annually, etc. Supply the expected payment dates and make sure it’s a uniform month. For instance, it is best to avoid 31st dates as they do not appear in all the months.
Step 4: Transfer the Data to a Template
Finally, copy all the data from your draft and transfer them into a payment schedule template.
Pros and Cons of Payment Schedules
As with most things, payment schedules have their merits and downfalls. Here is an outline of the pros and cons of using this system:
- A payment schedule allows regular payments to be made, which means that contractors can keep providing their services, and the company keeps running.
- Regular payments also ensure that companies can keep track of their net profits after paying off all their debts, loans, and bills.
- A contractor payment schedule allows homeowners to make broken-up payments, giving them enough time to come up with adequate funding.
- Regular payments prevent disputes between companies and their suppliers, especially these arising from delayed or missed payments.
- Through a payment schedule, a company can determine whether their bills are overwhelming the company and must be reduced.
- Construction schedules usually stretch billings over time and can lengthen a project.
- Payments schedules take a lot of time and manpower to prepare and adjust, especially when employees have different payment dates.
- Construction schedules can cause conflict when the contractor and homeowner can’t agree on the amount of work that has been completed and the payment that should be made.
Frequently Asked Questions
How do I make a payment schedule?
Payment schedules should be realistic for both entities. You can prepare them by:
- Step 1: Identifying the parties that should receive payment
- Step 2: Indicating the amounts that should be paid.
- Step 3: Indicating the number of installments necessary for a complete payment
- Step 4: Supplying the payment dates
- Step 5: Calculating the interest (where applicable)
- Step 6: Specifying the consequences of non-payment
What common bills do you pay monthly?
Depending on your spending habits, common monthly bills include
- Health insurance
- Child or pet care
- Cell phone bills
What is a payment schedule in construction?
A payment schedule in construction or a draw schedule is an agreement between a contractor and homeowner on the payments to be made depending on the progress of a project. They usually break down the large payments of a project into manageable installments.
Many problems can arise when one entity has to pay another entity for services rendered or goods provided. A lack of cash flow caused by late payments can lead to disputes, delayed shipments, stalled projects, unhappy employees, fines on loans, or disconnected utilities. Consequently, having a working Payment Schedule Template can save a company a lot of time and ensure things run as they should.