Match the schedule to how your customers are paid. Someone paid every two weeks finds a matching schedule easier to keep than one large monthly payment. A date a day or two after payday beats one the week before it. Then size the deposit and the number of payments so each one is an amount they can plan around.
Why does the schedule matter so much?
A payment plan works when each payment fits inside the customer's month. The total rarely decides whether someone keeps up. The timing and size of each payment usually does.
A $1,050 payment due on the 1st can be hard for someone whose paycheck arrives on the 5th. Two payments of $525, each landing the day after payday, can be easy. It's the same money, but a very different experience.
How do you pick the right frequency?
Start with how your customers are paid, not how your books close:
- Weekly suits customers paid weekly, and short programs where a monthly plan would barely get started before the program ends.
- Every two weeks lines up with a common pay cycle, and each payment is half the size of a monthly one.
- Monthly suits salaried customers, larger balances, and customers who budget by the month.
- Quarterly or yearly suits business customers and long agreements more than individuals.
If you don't know how your customers are paid, ask at sign-up. One question saves a lot of missed payments.
How big should the deposit be?
The deposit does two jobs: it confirms the commitment, and it lowers every payment after it. A larger deposit means smaller installments, but it can also be the reason someone doesn't sign.
A good test is the size of the first regular payment. If the deposit brings each installment down to an amount the customer says they can handle comfortably, it's the right size.
When should the first payment be?
Tie it to something the customer will remember: a start date, a delivery date, or the first payday after either. Avoid dates that land before the customer has started receiving what they paid for, unless your terms say so clearly.
Once you've chosen, write the terms down per product or program where your sales team works, so every rep offers the same schedule.
Try it
Change the price, deposit, number of payments and frequency to see each payment and the last date.
Is there a cost to more frequent payments?
A small one. More payments mean more transactions, and card fees include a fixed amount on each one. Bank transfers cost less per payment on large amounts, because ACH fees are usually capped. On most plans the difference is a few dollars, far less than the cost of a payment that doesn't come in.
Paycove runs plans on any schedule, from daily to yearly, built from the deal in your CRM and charged on the dates you set.
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