Up Front Payments

[gapgb]

Following on from a different thread

How many people get some kind of up front payment when dealing with larger orders?

I ask for 30% up front with new customers or a monthly paymetn schedule if I'm contracted to work over a few months.

Guy

 

[bwglaw]

With the varied work we do at Hands On Group each Directorate/Company has different procedures on whether to request upfront payment.

For instance Hands On Access Ltd provides Interpreters to deaf people across the UK. Given the nature of the work we don't ask for upfront payment and many of our clients are local and central government.

I do a large amount of legal work and ask for payment on account. This varies from client to client. Usually I ask for fees/costs to cover the first few steps in legal proceedings.

Hands On Internet Ltd develop websites - they always ask for 25% upfront. The % varies from project to project because we take into account any risk factors.

We also ask clients to sign a service agreement and return with deposit. No deposit, no service. If it goes wrong as Legal Director I pick up the pieces, or in some cases, break them into pieces!

All goods/service providers should ask for a deposit because in law this is what we call "legal consideration" and there must be 'consideration' for a contract to be enforced. That is not to say that no cash deposit means no contract - more complex than that but won't waffle on.

Just email if you need legal guidance

 

[KM-Tiger]

In the niche I operate in upfront payments are the norm, and vary between 50% upfront and 50% on completion for a short contract - say up to 2 months, and 30%, 30%, 30%, & 10% for a large contract that might span 6 months.

What I've found with this is that you won't get if you don't ask, and if you doubt the client insist on payment before delivery. As long as you spell this out at the outset, I've never had a problem.

Suggest payment terms slightly better than you really need, and let your client come back with what you really want.

The difficulty I find is with small jobs that are over and done with in 1-2 weeks. Usually we've done them before I've even quoted. The good clients pay promptly and we welcome them back. The others that need to be chased wil be declined if we are busy.

 

[Enigma121]

We never used to insist on this, but ran into a few timewasters.

We now take a deposit of 25% by default. This covers costs of initial quoting and high level design work.