What two prices should an installment invoice state?
An installment invoice should show the cash price and the installment price: the total the customer pays under the payment plan.
Key takeaways
- Put both prices together so the customer can compare them.
- Check that scheduled payments add up to the installment total.
- Review whether Wisconsin's installment-loan section applies before relying on its prepayment rules.
- Keep the accepted invoice and payment schedule together.
Put both on the invoice, and list the number of payments and the amount of each payment beside the installment price, so the customer can see the difference without doing the math.
The cash price is what the goods or services cost if the customer pays everything at once. Your invoice can call it the "cash price" or the "paid-in-full price," but pick one label and use it every time. The installment price is what the customer pays across the whole plan. When you charge for time, that total can be higher than the cash price, and the customer needs to see that gap before they agree to the plan.
Stating both prices protects you as well as the customer. If a customer later disputes what they agreed to, a written invoice that shows both figures is far easier to point to than a memory of a phone call. The same two numbers also help a bookkeeper track how much of each invoice is still owed and how much of the total is the cost of paying over time.
Where does the two-price pair come from in Wisconsin?
The pair comes from an annotation to Wisconsin's statute on installment loans and forbearances, which sits in chapter 138 of the statutes. You can read the section on the Wisconsin Legislature's statute page. An annotation is a note that describes how a section has been explained or applied, so it is not the statute's own wording. The example in the annotation is a roofing and siding contract with a cash price of $2,660 or 60 payments of $61.72. The annotation calls that deal a time-price differential transaction.
In plain words, the label points to the difference between what a buyer pays in cash and what the buyer pays for taking time to pay. The example shows the two-price setup clearly. One figure is the cash price. The other is the payment plan, and the payments add up to more than the $2,660 cash price.
Be careful about what this example proves. A single annotation example does not tell you how a court would treat your invoice, and it does not say that every invoice with a payment plan falls under this section. The annotation shows the vocabulary and the structure. Whether your own arrangement is covered is a separate question, and the rest of this post explains which parts of the section you should check.
How do I work out the installment price?
Add up every scheduled payment, and make sure the total matches the price you intend to charge. In the annotation's example, the installment price is the sum of 60 payments of $61.72 each. If your plan has a different number of payments or a different amount for each payment, the installment price changes with it, so recheck the math each time you send a new invoice.
Write the number of payments, the amount of each payment, and the due date of the first payment on the invoice. Then write the installment price as a single total. Customers read the total first, and a total that does not match the schedule underneath it invites questions you could have avoided. For schedule setup, see invoice payment schedules.
Watch for add-ons. If the plan includes a late charge, a service fee, or any amount beyond the goods or services themselves, decide whether it belongs in the installment price, and say so on the invoice. A customer who sees a total that differs from the payments they were promised has a reason to question the whole invoice. Keep the cash price and the installment price consistent with each other by listing what each one includes.
Payments rarely divide evenly. If the installment price does not split exactly into equal payments, decide in advance how the difference will be handled, usually by making the last payment slightly larger or smaller. Write that rule on the invoice next to the schedule, so the final payment does not come as a surprise.
A simple check helps. Ask someone who did not write the invoice to read it and tell you, in their own words, what the customer pays in full and what the customer pays under the plan. If they cannot answer in one sentence each, the invoice needs more work before it goes out.
Does Wisconsin's installment-loan section cover my invoice?
It may not, and you should check before relying on it. The section governs loans or forbearances that are repayable in installments. The first subsection you need to read, paragraph (1)(c), addresses installment arrangements other than the ones described just before it. Read the full paragraph on the statute page before deciding whether it applies to your arrangement.
The first question is whether a payment plan on an invoice counts as a loan or a forbearance under that wording at all. Whether your plan fits is a judgment about your facts, and the answer can change if the terms change. Write down the facts you relied on, such as who is paying, over what period, and whether any money is owed before the plan starts, so you can show later why you reached your conclusion.
Two other limits matter for a small business. Subsection (6) says the section does not apply to transactions governed by other chapters. Read that subsection in full to identify those chapters before deciding whether an exclusion applies. Subsection (7) says the section does not apply to a loan or forbearance of $150,000 or more made after May 26, 1978, unless it is secured by an encumbrance on a one- to four-family dwelling that the borrower uses as a principal residence. An invoice under $150,000 is not excluded by that dollar line on its face, but the other limits still apply, so read the whole section rather than relying on one piece of it.
What do I have to say about paying early?
If your arrangement falls under this section, say that the customer can prepay in full or in part, and that paying in full may earn a refund of interest charged. The statute page has the exact wording, which you should copy carefully rather than paraphrase.
The refund rule is more specific than the disclosure. For other loans of this kind, the statute says the refund may not be less than the difference between the interest charged and interest at the rate contracted for. That difference is computed on the unpaid principal balances that were outstanding from time to time before the loan was paid in full. In plain terms, the refund has to be worked out from the balance the customer still owed at each stage of the plan, not from the original total.
This raises a practical question about your invoice. If your plan includes a time charge, you need to decide whether that charge counts as interest for this purpose. The statute speaks of interest, and an invoice may use different words. That is a question to settle with a lawyer, not one to guess at when a customer asks for an early payoff.
Prepare for early payoff before anyone asks. Keep a schedule that shows the unpaid balance after each payment. With that schedule, you can work out a refund quickly and show your math. Do not write a refund figure on the invoice unless you have a method you can apply consistently to every customer on the same plan.
What does the customer need to see before agreeing?
The customer should see both prices, the number and amount of each payment, the due dates, and any extra charge, all before they agree to the plan. These are good habits for any payment plan. Present them as clear payment terms rather than treating the annotation as an invoice checklist.
Give the customer a copy they can keep. Ask for the acceptance in a form you can file, whether that is a signature, a dated reply, or a click-to-accept step in your invoicing software. The method matters less than having proof that the customer saw the plan and agreed to it. A signed or accepted invoice that shows the plan in full is the record you will rely on if a payment is late or a question comes up. Include the date, your business name, the customer's name, a description of the goods or services, and the two prices. Keep a copy yourself, and file it with the payment schedule. Review electronic invoice records when organizing that file.
Make room for questions. A customer who asks what happens if they pay early or miss a payment is doing you a favor, because the answer should already be on the page. If you do not know the answer, say so, and check it before you respond. Guessing about terms that affect money is how small disputes become large ones.
Avoid vague wording. Phrases such as "flexible payments" or "pay as you can" sound friendly, but they do not tell the customer what they owe. Use the same plain numbers you used for the cash price and the installment price, and state the schedule in dates and dollar amounts.
How do I lay out the invoice?
Put the cash price and the installment price together near the total due, and use the same labels in the payment terms. The customer should be able to compare the two figures without turning pages. A simple layout works better than a crowded one with many small notes.
The table below lists the items most payment-plan invoices should show, along with what to write for each one.
| Item | What to write |
|---|---|
| Cash price | The total if the customer pays in full at the start |
| Installment price | The sum of every scheduled payment |
| Payment count and amount | The number of payments and the amount of each one |
| First due date | The date the first payment is due |
| Prepayment statement | Whether early payoff is allowed and how any refund is figured |
| Extra charges | Any late charge, service fee, or add-on, or a clear statement that none applies |
Illustrative example: checking the total
Suppose an illustrative plan has a cash price of $450 and 5 payments of $90, with no extra charges. Multiplying 5 by $90 gives an installment price of $450. The prices are equal in this example. This arithmetic checks the schedule; it does not determine which legal rules apply.
Use the same order on every invoice you send. Customers who see the same layout each time learn where to look, and you spend less time answering questions about where a number came from. Save the layout for reuse so the terms do not change by accident from one invoice to the next.
What if the plan changes after I send the invoice?
Send a revised invoice rather than editing the old one in place. Write the new invoice with its own number, refer to the original invoice number, and restate both prices and the full payment schedule. A customer who sees only the new numbers, without the history, can misread what changed.
Say plainly what changed. If the number of payments went up, or the amount of each payment went down, state the old term and the new term side by side. Include the date the change takes effect, and ask the customer to accept the revised plan in writing. A quick email reply that says "agreed" is a record, but a signed revision is a stronger one.
Keep the old invoice on file. Do not destroy or overwrite it. If a dispute comes up, you will want to show what was originally offered, what the customer agreed to, and when each change was made. Your records should tell that story without gaps.
How should I record an installment invoice in my books?
Keep the two prices visible in your records, so that the cash price and the installment price can both be traced back to the invoice. A bookkeeper who records only the total received has lost the information needed to explain the plan later.
Set up one line for the sale and separate lines for any time charge or add-on, if your plan has them. Record each payment as it arrives, with its date and the balance remaining afterward. Compare the balance against the payment schedule every month. A gap between the two is the first sign of a missed payment, a misapplied payment, or a mistake in the schedule. Send a reminder before each due date when the plan allows it, and note in the record when a reminder goes out. That note helps if the customer later says they were never told a payment was coming due.
Ask your accountant how to handle the time charge for tax and reporting purposes. The right method depends on how your business keeps its books and on how the charge is described. Give your accountant the invoice, the schedule, and the prepayment terms, so the answer reflects the actual deal.
Today, check one existing invoice: add up its scheduled payments and compare the result with its stated installment price.
Should I talk to a lawyer before I send the invoice?
Yes, if the plan is large, runs for a long time, or is likely to be disputed. The statute includes exemptions, dollar cutoffs, and references to other chapters that need review before you rely on it. A lawyer who works with Wisconsin consumer or commercial credit can read the full text and tell you whether chapter 138 applies to your plan.
Bring the invoice layout, a sample payment schedule, and the exact prepayment wording you plan to use. A short list of questions written in advance keeps the meeting focused and saves fees, whatever the lawyer charges for the review. Ask three questions: whether the plan is a loan or forbearance under the section, whether any required statement is missing, and how a refund should be calculated if a customer pays off early. Those answers will shape your standard wording for every future invoice.
Two prices, a clear payment schedule, and a written prepayment statement are a starting point for reviewing your invoice terms. Check the full statute before you rely on any part of it, and do not treat one annotation example as the whole rule. Revisit your invoice wording once a year, or whenever your payment terms change, so the wording stays matched to the plans you actually offer.
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