Posted: February 26th, 2023

Contracts and Payment Structures

Contracts and Payment Structures

Assignment Overview

For this Case Assignment, write a 3-page paper (excluding title and references pages). Include three scholarly sources. Discuss the six payment structures below and answer the assignment questions: 

Timing

· Many customers prefer to pay upon completion and acceptance of all work. Ideally, the delivery organization would prefer to be paid in advance to avoid having to finance negative cash flows. The reality is that the parties usually negotiate something that is fair and reasonable to both sides.

· Most customers are accustomed to paying within 30 days of an invoice.

· Be aware that some customers stipulate that payments be tied not to receipt of the invoice but rather to their acceptance of the invoice. This can extend the final receipt of payment for several weeks or months.

Payment Schedule

· If customers cannot pay the lump sum at one time, you may offer a schedule for payment. You may specify how many bills the customer will receive and what the rates (usually higher) are under this plan.

Invoicing Process

· You may want to specify when the customers will receive the invoices and how many they will receive in total.

Substantiating Documents

· Make sure the method of payment defines the substantiating documentation required to accompany each claim for payment.

· Where possible, the delivery organization should propose that such substantiation will be maintained within its organization and made available for inspection by authorized customer representatives should the need arise. Attaching the actual support documents to an invoice can be extremely time-consuming and can result in delays in invoicing customers.

Holdbacks

· If there are holdbacks applicable, understand when and how they will be paid. It may be desirable and reasonable, for example, to suggest that accumulated holdbacks be liquidated on completion of major milestones for long-term contracts.

Interest Charges

· The method of payment should define when interest on outstanding payments will be payable and the rate at which interest is to be calculated. 

Assignment Questions:

· Discuss each Payment Term individually and provide information as to why these terms are needed in contracts.

· For each Payment Term and Condition above (Timing, Payment Schedule, Invoicing Process, Substantiating Documents, Holdbacks, and Interest Charges), how does each impact or improve the Contract?

· Is a Payment Terms and Condition Section needed for all contracts? Why or why not? Provide examples and support your work.

Case Study Assignment Expectations

1. The minimum length requirement for this Module Case Assignment is 3 full pages (excluding Title and Reference pages). Include 3 scholarly sources. 

2. Provide an APA-formatted title page. Use

APA 7th Assignment Template

3. Include an introduction, a body using 3 scholarly sources cited to support your work, and a conclusion that aligns with your purpose statement, summarizes each section, and then wraps up into a final thought.

Contracts and Payment Structures

For this SLP assignment, write a 2-page paper (excluding title and references pages). Include two scholarly sources (cited and referenced per APA 7).

Locate and review the following article:

Bonnans, J. F., Cen, Z., & Christel, T. (2012). Energy contracts management by stochastic programming techniques.
Annals of Operations Research, 200(1), 199-222. ISSN 0254-5330. DOI 10.1007/s10479-011-0973-5

Address the bulleted requirements below

· Submit a two-page critique of the article mentioned above. 

· Summarize the article and also state how you could apply the information to a real-world scenario (this could be your SLP contract or another scenario of your choice).

Additionally, consider the organization, business situation, and contract you developed in Modules 1 and 2. For this assignment, integrate the concepts and principles you have been studying in this module and refine your existing Contract by adding a Payment, Terms, and Conditions section to the Contract.

· Include the following (timing, payment schedule, invoicing process, substantiating documents, holdbacks, and interest charges) and try to incorporate as many of them as possible into your Contract.

· In a paragraph or two at the end of your Contract, list the elements you added to your Contract and explain how each strengthens the agreement and/or protects one or both parties from litigation. Cite and reference sources to support your work.

· Add your revised Contract to the end of your two full-page paper and place it on its own page after the references page. 

SLP Assignment Expectations

1. The minimum length requirement for this Module SLP Assignment is 2 full pages (excluding Title and Reference pages). Include 2 scholarly sources. 

2. Provide an APA-formatted title page. Use

APA 7th Assignment Template

3. Include an introduction, a body using 2 scholarly sources cited to support your work, and a conclusion that aligns with your purpose statement, summarizes each section, and then wraps up into a final thought.