A payment milestone makes part of the contract price due when a defined event or deliverable is completed and accepted. Common triggers include design approval, tooling completion, test acceptance and shipment.
How should a business apply Payment Milestone?
Use evidence-based triggers rather than calendar dates alone. State the amount, acceptance criteria, reviewer, invoice requirement and remedy for partial completion.
What records support Payment Milestone?
Retain the milestone schedule, deliverable, acceptance record, invoice, approval, payment reference and any holdback.
Payment Milestone: control and evidence
| Area | What the record should show |
|---|---|
| Control | Use evidence-based triggers rather than calendar dates alone. State the amount, acceptance criteria, reviewer, invoice requirement and remedy for partial completion. |
| Evidence | Retain the milestone schedule, deliverable, acceptance record, invoice, approval, payment reference and any holdback. |
| Tradeoff | Paying against supplier activity instead of accepted output reduces the buyer’s leverage when work is incomplete. |
What should buyers verify about Payment Milestone?
Paying against supplier activity instead of accepted output reduces the buyer’s leverage when work is incomplete.
