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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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    • Why should i have credit accounts. I too am old fashioned and i run my business with real money and pay for everything as i go with debit card. Clients pay me 10% non returnable deposit on acceptance of the quote and a further 40% the week prior to the job. Then staged payments if the job is long enough. 10% assures i schedule them in. Never had any problem with this and at least i cover all materials and some of the labour. My final payment on larger jobs generally covers the profit so if i didnt get paid at least basic costs are covered. Over the years i have rarely not been paid.

  • PRO
    I've just today had a quote for a kitchen installation the guy comes with a very good reputation.
    He's asking 40% deposit and that's fitting only.
    I've already paid for the kitchen itself.
    So why should we be any different?
    • Can I turn it the other way round Richard? You wouldn't pay your employees a weeks wages on a Monday, so why should a kitchen fitter be any different.  

      • PRO
        I can see that side of the argument too.
        But I think he does it because he can as he's always very busy and comes highly recommended.
        I don't have a problem as I've got to pay anyway!
  • I personally believe that its a sign of good faith. I certainly wouldn't trust a customer that was refusing to pay a deposit of around 20% of the quoted amount. 

  • PRO
    I always ask for 40 to 50% Deposit on larger jobs. Once bitten twice shy. Also think it shows the client is genuine and not going to text the night before to cancel the job!
  • Anything over £1000 I take 40% booking, 40% interim, 20% on final invoice, but always ask for any snagging/inspection prior to last day on site and always get sign off or approval before leaving site, then invoice, I also add 3% admin on quotes used as a 3% discount if paid within 7 days.works. works really well for me just a question of trust with client, communication is key, including regular statements for them on long jobs, at the end of the day, the customer has huge rights get it all right all will go well. bad customers don't want to pay upfront or at the end either.

  • PRO

    When I was in the motor trade a few years back, regular customers weren't asked as I knew them and their cars. New customers coming in for a big job straight off the bat, I used to ask for a deposit to cover the costs of the parts. That way if they defaulted then all I lost was the labour. Uusally it was pretty straightforward to lay out the honest cost of the parts, and people rarely complained.

    I got caught out the once, with a customer who I'd done maybe 3 jobs for over a year.

    I'd done som emajor work on his car's cylinder head, skimmed, head gasket, seals etc.... and the day after returning and before I got paid, his gearbox gave up! He declined to pay any more money to rescue the car as it wasn't economocally viable any more, and also declined to pay me for the head work as it was throwing money down the drain at that point.

    After a lot of argument, and considering small claims etc.... I walked away. Non-payment was very rare for me, so I put it down to expereince.

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