Payment terms are the clause most creative agencies copy from a template, paste into every contract, and never think about again. That's a mistake. Poorly written payment terms are the direct cause of delayed invoices, awkward client conversations, and the kind of cash flow gaps that force studios to delay paying their own team. Getting them right takes less than an hour and saves far more than that over the life of any client relationship.
What payment terms actually cover
Most people think payment terms means the number after "Net": Net 7, Net 14, Net 30. That's one piece. A complete set of payment terms for a creative agency covers six things: when invoices are issued, what triggers each invoice, when payment is due, how payment is accepted, what happens when payment is late, and what rights the agency retains until payment clears.
Skipping any of these creates a gap a slow-paying client will fall through. Not because clients are malicious, but because people pay what's urgent, and vague terms make your invoice feel optional.
Setting your payment schedule
The most common mistake is issuing a single invoice at project completion. For any engagement longer than two weeks, a milestone-based schedule protects both parties. A typical structure for a video production project runs like this:
- 50% deposit due before work begins
- 25% due upon delivery of the first cut or draft
- 25% due upon final delivery of approved assets
The deposit does two things. It funds early production costs and it confirms the client is serious. A client who won't pay 50% upfront is telling you something before a single camera is pointed at anything.
For retainer clients, invoice on the first business day of the month for that month's work. Not at the end. Invoicing at the end of the month for work already completed puts you in the position of chasing money for services you've already delivered in full.
Writing the due date clearly
Net 30 sounds standard. In practice it means different things to different clients. Some count from the invoice date. Some count from when their accounts team receives it. Some count from the end of the month the invoice was issued. Write it plainly: "Payment is due within 14 calendar days of the invoice date." No ambiguity. No interpretation required.
If your business needs faster cash flow, Net 14 is reasonable for agencies. Net 7 works well for smaller projects under $2,000. Net 30 is only appropriate if you're dealing with large corporations whose procurement systems genuinely can't move faster, and even then it should come with a larger deposit to offset the wait.
Late payment clauses that actually work
A late payment clause with no teeth is decoration. Write a specific consequence: "Invoices unpaid after the due date will accrue interest at 1.5% per month (18% per annum) on the outstanding balance." Under Australian law, this is enforceable when it's stated clearly in a signed agreement before work commences.
Pair the interest clause with a suspension-of-work clause. If a client's invoice is more than 7 days overdue, you retain the right to pause all work on their project until payment is received. This isn't a threat you need to make often. The existence of the clause in the signed contract is usually enough to move an invoice up someone's priority list.
If you've had consistent trouble with late payments, the practical guide to handling late payments covers escalation steps including formal demand letters and how to engage a debt recovery service without torching the client relationship.
Accepted payment methods and what to specify
List your accepted payment methods explicitly. Direct bank transfer (EFT) is standard in Australia and has no processing fee. Credit card payment is convenient for clients but costs your agency 1.5% to 2.5% per transaction. If you accept cards, state clearly whether you absorb that fee or pass it on. "Credit card payments will incur a 2% surcharge" is a legal and clear disclosure.
Never accept payment in instalments that weren't agreed upfront. A client who says "can I pay half now and half next week?" after receiving a final invoice is renegotiating terms you've already set. It's fine to accommodate this occasionally as a goodwill gesture, but write it into an amended agreement, not a casual email chain.
Intellectual property and payment
This clause surprises clients who aren't expecting it, which is exactly why it needs to be in your terms before work begins. IP ownership of deliverables transfers to the client only upon receipt of full payment. Until then, the agency retains all intellectual property rights to the work.
In practical terms, this means a client who has received a finished video but hasn't paid the final invoice doesn't yet own that video. They can't publish it, broadcast it, or use it commercially until the invoice is settled. This isn't adversarial; it's a standard commercial protection used across every creative industry. Your services agreement should state this clause in plain language so clients read and understand it before signing.
Deposits for new clients
Always require a deposit from a new client before beginning any substantive work. Research, scripting, location scouting, casting, pre-production of any kind. All of it starts after the deposit clears. Not after the deposit is promised. After it clears.
Some agencies waive deposits for long-term clients who have a strong payment history. That's reasonable. But the default should always be a deposit, and the exception should require a track record to earn it.
How to present payment terms to clients
Don't bury payment terms in a block of legal text at the end of a contract. Walk through the payment schedule verbally or in a summary email during onboarding. When a client understands what's due and when before work starts, there's no ambiguity and far less friction when invoice day arrives.
A clear client onboarding process makes this easy. Onboarding for creative agencies covers exactly where in the intake process to introduce and confirm financial terms so they land as a natural part of doing business, not a last-minute conversation.
Send a reminder email 3 days before each invoice is due. Not as a nudge, but as a service. "Your next payment of $X is due on [date]. Here's the payment detail." It removes any claim of forgetting, and it positions your agency as organised and professional, which matters when a client is deciding whether to hire you again.
A note on Australian consumer law
If you work with individual consumers rather than businesses, the Australian Competition and Consumer Commission has specific guidance on what payment terms can and can't include when contracting with individuals. Terms that are considered unfair under Australian Consumer Law may be unenforceable even if a client has signed them. The safest approach is to have a solicitor review your standard terms at least once, particularly the late payment and IP clauses.
Payment terms aren't glamorous. Neither is a 90-day-old invoice sitting in your accounts receivable. Write your terms clearly, present them early, and enforce them consistently. That consistency is what separates a studio that runs on cash from one that runs on hope.