Payment terms in quotations: How to set clear expectations with clients

A good quotation does more than tell a client how much your services cost. It should also explain when payment is due, how the client can pay, and what conditions apply.

Without clear payment terms, even an agreed price can lead to misunderstandings. A client may approve a quotation but delay the deposit, a project may be completed while the final payment remains outstanding, or both sides may disagree about when payment should have been made.

Clear payment terms help both parties understand what has been agreed before work begins. They also help service businesses manage cash flow and plan their work with greater confidence.

If you're unfamiliar with quotations or how they differ from invoices, start with our guide: What Is a Quotation?.

In this guide, we explain how to write payment terms in a quotation, compare common payment structures, and share practical examples for service-based businesses.

1. What are payment terms in a quotation?

Payment terms explain how and when a client must pay for the goods or services being offered.

Depending on the agreement, they may include:

• Amount due: The full quotation value or a portion of it.
• Payment timing: Before work starts, after a milestone, or by a specific date.
• Payment method: Bank transfer or another method accepted by both parties.
• Payment schedule: Multiple payments for projects delivered over time.
• Related conditions: Terms concerning deposits, acceptance, handover, or changes to the scope of work.

Not every quotation needs lengthy payment terms. A small, one-off service may require only one clear sentence. A project lasting several months may benefit from a more detailed payment schedule.

2. Common payment structures for quotations

There is no single payment structure that works for every business. The right approach depends on the service, project size, upfront costs, and agreement with the client.

Full payment upfront

The client pays the full amount before the service begins.

This approach may suit smaller, clearly defined services or prepaid service packages.

Example:

100% of the quoted amount is payable before the service begins.

For larger projects, however, asking for full payment upfront may discourage potential clients. Consider whether this arrangement is appropriate for the service and the relationship.

Deposit upfront, with the balance paid later

The client pays part of the quotation value before work begins and settles the remaining balance according to the agreed terms.

This can work well for design projects, marketing services, software development, and other work that requires an upfront investment of time and resources.

Example:

A 50% deposit is payable upon acceptance of the quotation and before work begins. The remaining 50% is payable upon completion of the agreed work, as specified in the quotation.

The deposit percentage can vary by project. The important thing is to state the amount, when it is due, and what needs to happen before work starts.

Milestone-based payments

For longer projects with several stages, the total amount can be divided into multiple payments.

Each payment should be linked to a clearly defined milestone so both parties know when it becomes due.

Example:

A website development project worth VND 60,000,000 could use the following payment schedule:

Milestone	Payment percentage	Amount
Project confirmation	30%	VND 18,000,000
Design completion	30%	VND 18,000,000
Website development completion	30%	VND 18,000,000
Final handover	10%	VND 6,000,000
Total	100%	VND 60,000,000

This is an illustrative example, not a standard payment structure. The actual percentages and milestones should reflect the project scope and the agreement between both parties.

Tip: Consider creating a separate quotation for each payment stage

For projects with many instalments, consider creating a separate quotation for each payment stage instead of putting every payment into a single quotation.

This makes it easier to identify the amount due, the relevant work, and the details associated with each payment. When it's time to issue a VAT invoice for a particular payment, the corresponding quotation can also make the relevant information easier to find.

However, separate quotations are not always necessary. For a project with only one or two payments, a single quotation with a clearly defined payment schedule may be sufficient. Choose the approach that best suits the project and your agreement with the client.

Recurring payments

Businesses providing ongoing services, such as marketing, consulting, accounting, or software maintenance, may charge on a monthly or quarterly basis.

Example:

The service fee is payable by the fifth day of each month for the corresponding service period, as agreed by both parties.

Make sure to clarify whether payment is due before or after the service period, the exact due date, and what is included in the recurring fee.

3. How to write clear payment terms

Good payment terms do not have to be complicated. They should answer three questions: How much must the client pay, when must they pay, and how can they pay?

Specify the amount or percentage

Avoid vague phrases such as "deposit as agreed" or "payment according to progress" when the details have not been established.

Instead, state the percentage or amount due at each stage.

For example, instead of writing:

Payment will be made according to project progress.

Write:

The client will pay 40% of the project value upon acceptance of the quotation, with the remaining 60% payable upon completion of the agreed work.

Define when payment is due

Phrases such as "upon completion" or "on delivery" may be interpreted differently if the conditions have not been clearly defined.

Specify the deadline or event that triggers the payment.

For example:

The final payment is due within seven days of the client's acceptance of the agreed deliverables.

If payment depends on acceptance, clarify how acceptance will be confirmed and which deliverables are covered.

Include payment instructions

If clients are expected to pay by bank transfer, include the relevant details in the quotation, such as:

• Account holder name.
• Bank account number.
• Bank name.
• Required transfer reference, if applicable.

Providing these details upfront makes it easier for clients to pay and helps the business identify incoming transfers.

Clarify other relevant conditions

For more complex projects, consider documenting conditions that may affect payment, including:

• What needs to happen before work starts.
• What is included in the quoted price.
• How additional work or changes to the scope will be handled.
• Acceptance and handover conditions.
• Cancellation, refund, or deposit terms, where applicable.

These conditions should reflect the actual agreement and applicable law. For larger projects, important terms should be documented in an appropriate contract or written agreement rather than relying solely on a short note in the quotation.

4. Payment terms examples for service businesses

Here are several examples that businesses can adapt to their own services and agreements.

Design agency

The client will pay 50% of the quoted amount upon acceptance of the quotation and before the project begins. The remaining 50% is payable after completion of the agreed design work and before the final design files are handed over.

Marketing agency

The service fee is payable monthly, by the fifth day of each month for the corresponding service period. Any work outside the agreed scope will be quoted separately and carried out only after the client has approved the additional cost.

Software development company

The project fee will be paid in three instalments: 30% upon project confirmation, 40% upon completion of the development phase, and the remaining 30% after testing, acceptance, and handover in accordance with the agreed scope.

These examples are for guidance only. Adjust the percentages, deadlines, and handover conditions to suit the service and the agreement with the client.

5. Common mistakes to avoid

Even when a quotation clearly describes the price and scope, small omissions can complicate payment.

Stating the price without specifying when it is due

A client may agree to the price while both sides remain unclear about the payment schedule. Agree on the timing before work starts.

Introducing payment conditions too late

If a deposit requirement or other payment condition is disclosed only after the client has accepted the quotation, it can create unnecessary friction. Discuss and document the terms upfront.

Failing to update the quotation when the scope changes

When a client requests additional work or changes the original requirements, confirm the revised scope, price, and payment schedule before proceeding.

Leaving out bank details

Clients may need to contact you again to request payment information, adding an unnecessary step. Including bank details in the quotation makes payment more convenient.

Failing to track outstanding payments

When managing multiple clients, it is easy to lose track of an unpaid deposit or an overdue final payment. Keep track of quotation status and payment obligations so you can follow up when needed.

6. From quotation to payment: Make the next step easier

Clear terms tell clients when to pay. A convenient payment experience helps them follow through.

A professional quotation should make it easy to find:

• The total amount.
• The deposit or amount due at each stage.
• The payment deadline or applicable conditions.
• Bank account details.
• A payment QR code, where appropriate for the client's bank transfer method.

A QR code can make a bank transfer more convenient by reducing the need to enter account details manually. It is still useful to display the bank information so clients can verify the recipient before making a payment.

Just as importantly, quotations should be easy to create, send, and track. When quotations are stored alongside customer details and payment status, businesses can more easily see which quotations have been accepted, which payments have arrived, and which amounts still need attention.

7. Create quotations and issue VAT invoices more easily with invoi.vn

For service businesses, a quotation is often one of the first documents sent to a client. A clear quotation communicates professionalism, defines the scope of work, and establishes payment expectations from the beginning.

But the work doesn't stop when the client accepts the quotation. When it's time to issue a VAT invoice, the business still needs the agreed information, such as the customer's details, service description, and transaction value.

Invoi.vn lets you turn a quotation into a VAT invoice without manually re-entering information that's already there.

Because much of the information in a quotation is also needed for the final VAT invoice, you can reuse existing details instead of entering them all over again. This saves time and helps reduce errors caused by repeated manual data entry.

It also means invoicing doesn't have to start and end with the accountant. Business owners or the people who work directly with clients can prepare quotations and transaction details, then turn them into VAT invoices when needed. Accountants can still review the information and handle the accounting tasks that require their expertise.

When quotations and invoices are managed on the same platform, business owners and accountants can work from the same information, reducing unnecessary back-and-forth and the need to search across multiple files.

With Invoi, you can:

• Create professional quotations with clear service descriptions and payment terms.
• Include bank transfer details and a payment QR code to make payments more convenient.
• Turn quotations into VAT invoices without manually re-entering existing information.
• Manage customer details, quotations, and invoices in one place.

Create quotations, manage your business information, and issue VAT invoices more easily with invoi.vn.

Conclusion

Payment terms are more than an extra line in a quotation. They help a business and its client agree on expectations before work begins.

Whether you choose upfront payment, a deposit, or milestone-based payments, state the amount, timing, and relevant conditions clearly. Combined with complete bank details and a reliable way to track payments, clear terms can reduce avoidable misunderstandings and help you manage cash flow more proactively.

A good quotation does more than explain the value of your service. It makes the next step clear for both sides.