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Do you take a deposit/upfront payment?

Hi all,I have just spent an hour or so going through all our outstanding quotes to get updates and have had a couple declined and when I asked the reason they said due to the upfront cost involved.The upfront cost for this project was £300 of a £1000 job.We usually ask for a deposit on all quotes that are over £250 to secure materials (the deposit doesn't cover the cost but helps towards it).What's your views? Do you ask for any upfront payments? Have you ever had issues with this?

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  • PRO

    If its for a regular customer, I don't worry too much either way for that amount, if fact they sometimes offer some payment as they know I'm fronting up for materials.

    For a stranger, or a new customer......totally different story. I would have to be very confidant they were going to pay me. Sometimes I get the new customer to order the materials (and pay direct)  themselves, after pointing them to the right supplier.  This has the plus of taking the worry out of the job, but the minus of not allowing me to make my cut. It just depends how risk averse I feel about the customer.

  • There was a discussion a couple of weeks ago on this subject. My and many others view was that a diposit shows good faith by the customer. Worth a search for it as it ran to a few pages
  • I ask for a deposit on larger jobs where I could be out of pocket large sums of cash on materials. I have lost jobs because of it in the past but rather that than spend a fortune in time and money just to be told the customer can't pay. At least this way you only lose your time. Providing some sort of written contract also helps, having an official contract complete with terms and conditions gives them peace of mind.

  • PRO

    I always ask for a deposit payable 1 week before start date of 25%. It doesn't matter whether its for £500 or £5000+, i wouldn't start a job without it.

  • PRO

    The client has to pay at some stage so there shouldn't be a problem asking for a deposit.

    I always asked for 40% on new construction projects with staged payments on the balance..depending on the size of project.

    A deposit mitigates risk should there be any problems later down the line.

  • i ask for a deposit to secure the agreement once they give the go ahead for any job over 2k. deposit ranges from 150 up to 1000 dependent on size of contract and i do that just to ensure they keep to their side of the booking. had an experience when i first started of being told on the friday before i started that they weren't going ahead with the job.

    i take a 25% payment on the day we start and the rest upon completion, unless its a long job, then its stage payments.

  • PRO

    I'd reccomend everyone has a read of this: http://www.landscapejuice.com/2013/02/should-i-pay-a-deposit-before...

    It's a cautionary tale...one that led to the client losing out massively and the contractor going on to form another company. 

    • I know a guy in my town who runs double glazing companies. I say companies because he sets them up as ltd then while paying himself a large salary takes costomers deposits and while he does fit windows, when the money runs out and the overdraft is max,d out he shuts the business and seems to just pop up with a new name etc. Lots of people lose thier deposits at the last throws of the company. I dont know how he keeps getting bank accounts but he has been doing it for years. With a ltd co the customer, it seems, has little protection as it is its own entity
  • PRO
    Regulars and under £1000 no deposit, over £1000 20% deposit and remainder payment with their monthly invoice. New customers 10% deposit, 60% on completion and 30% within 30 days of completion. To date no one has ever taken my terms and all have paid the deposit to enable me to acquire materials and the remainder on the completion invoice.
  • I have never taken money 'up front' and I would never employ anyone that wanted money 'up front'.  Stage payments yes, as long as the customer is always 'ahead'.  But that's just 'old fashioned me'!  Let's face it, you will probably obtain your materials on a 30 day credit account anyway - and if you don't, you should.

    Why put another obstacle in the way of having a job accepted?  

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