Partial Pay

What Does Partial Payment Mean?

Partial payment means a payment that is less than the full amount due. Other terms for partial payment include part payment, installment payment, down payment, or upfront payment.

Partial pay can occur in many different situations, including:

What Are the Benefits of Partial Payments?

The benefit of partial payments for customers is that they allow them to be in control of some of the money to motivate a service provider to complete work as expected. The benefit for businesses for utilizing partial pay is that it allows for security against unforeseen circumstances that may affect the customer’s end of the transaction.

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How Do I Invoice a Partial Payment?

There are two primary ways to invoice a partial payment against an invoice:

Examples of Invoice Terms for Partial Payments

There are a few ways that partial payments can be worded on an invoice.

Here are a few examples:

Note that it is very important that all payment terms are listed clearly and fully explained on every invoice to avoid customer confusion and to pass payment liability to the customer.

Is a Partial Payment Considered Late?

A partial payment is not considered late if it was agreed upon by the creditor and payee in a signed contract. This can be the case with installment plans, grace periods, etc. The key thing here is communication and an understanding of terms. Many businesses have ways of working with customers who are behind if the customer reaches out to work out a solution, and may not consider a partial payment late in certain circumstances.

A partial payment is considered late if it is made after the due date or grace period and it is not written into the contract terms. This is especially the case if there has been no communication of allowing for any exceptions between creditor and payee.

Making a partial payment that is considered late may incur:

What Is Partial Redemption?

Partial pay of a callable or redeemable bond (a bond that may be redeemed by the issuer before its date of maturity) is called a partial redemption. A partial redemption may happen if corporate or municipal issuers want to issue new bonds at lower rates to save money on expensive interest.