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 actually buys

It covers the materials, so the job does not run on your money. It commits the customer, so nobody uses the quote you spent an evening writing to beat down a rival. 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. Customers who resist a percentage usually accept a figure with a reason.

Stage the rest against things the customer can see

A stage tied to a date invites an argument about whether you are running late. 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 see and touch.
3. On completion, before handover rather than afterwards.
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 to stall. A two week job does not need five of them.

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 becomes a negotiation. The customer has moved on, and your claim now concerns history.

It goes out at the job, with a photo of the finished work attached, and the approval usually lands 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. The stages, their triggers and their amounts all go in writing, and the customer accepts the lot in one action.

In Diract the customer opens a link, picks any optional extras, then accepts or declines. The deposit goes on a card in the same pass. The job starts funded, and the schedule that follows carries a written agreement from 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 an unpaid stage, before the next one starts rather than three days into it.

Say that in the quote. A customer who knows the rule rarely tests it. One who does has told you something while you are 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
• Two or three stages suit a job of a few weeks
• The schedule sits in the quote the customer accepts
• The rule that work pauses at the end of an unpaid stage goes in writing, and holds