Lump sum or lump sum is an amount of cash paid as a single payment instead of in installments or periodic payments. It’s often used in business contracts to ensure that the entire purchase price is paid upfront, generally before goods are delivered or services are rendered. Lump sum payments are also common when companies need financing for major projects, and in certain situations where parties agree on a flat fee. Whatever the context, lump sum payments provide predictability and allow individuals and organizations to budget accordingly.