Deposits and staged payments on a trade job

Most small trade businesses fund their customers. You buy the materials, you carry them for weeks, and you find out at the end whether the job was ever real.

A deposit ends both problems in one step, and the reason it is not asked for is almost never the customer.

What a deposit is for

It covers the materials, so the job does not run on your money. It commits the customer, so the quote you spent an evening on is not being used to beat somebody else's price down. And it tells you early that a customer who will not pay a deposit was never going to pay the invoice.

That last one is the valuable part. A deposit refused is information you would otherwise buy with three weeks of work.

Size it to the materials, not to a habit

Ten per cent is a convention, and on a job that is mostly parts it leaves you carrying the whole order. The deposit should cover what you have to buy before you start, plus enough of the first days to matter.

On a labour heavy job that might be small. On a supply heavy one it might be half. Explaining it as the materials makes the number obvious rather than negotiable, and customers who resist a percentage usually accept a figure with a reason attached.

Stage the rest against things the customer can see

A stage tied to a date invites an argument about whether you are behind. A stage tied to something visible does not.

1. On acceptance. The deposit, covering materials and commitment.
2. At a visible milestone. Rough in complete, frame up, first fix done. Something the customer can stand in front of.
3. On completion, before handover, not after.
4. Retention, where the contract has one, released at the end of the defects period.

Two or three stages is usually enough. Every extra stage is another invoice, another approval and another chance for the chain to stall, so do not split a two week job into five.

Ask at the moment the stage lands

A staged payment asked for on the day the stage completes is a formality. The same request a fortnight later is a negotiation, because by then the customer has moved on and your claim is about the past.

Raise it at the job, with a photo of what was finished attached, and the approval usually happens the same day.

Put it in the quote so nobody is surprised

The payment schedule belongs in the document the customer accepts, not in a conversation before it. Write the stages, what triggers each, and the amount, then let them accept the whole thing in one action.

In Diract the customer opens a link, picks any optional extras, signs to accept or declines, and pays the deposit by card in the same pass. The job starts funded, and the schedule that follows was agreed in writing by somebody who read it.

Decide in advance what happens when a stage is not paid

The rule that saves the most money is the boring one: work stops at the end of the stage that has not been paid, and it stops before the next stage starts rather than three days into it.

Say that in the quote. A customer who knows the rule rarely tests it, and one who does test it has told you something while you are still only one stage exposed rather than four.

What to do first

• Size the deposit to the materials you must buy before starting
• Explain it as the materials, so the figure has a reason
• Tie stages to things the customer can see, not to dates
• Keep it to two or three stages on a job of a few weeks
• Put the schedule in the quote the customer accepts
• Write down that work pauses at the end of an unpaid stage, and mean it