Can I ask for a deposit before works are completed?
Answering the question that many businesses ask before commencing a major project.
It is not uncommon for a Business to seek a deposit for works he is yet to commence. This will show that the Customer has the means and the intention of paying for his work.
It is not recommended however to request more than 10-20% deposit of a total price.
A Business should never be asking for 50% and up to the full amount of works before the job has been completed and the customers are fully satisfied with works. This should prevent jobs having longer time periods and ensure a quality finish.
Service Central would like to notify all of our valued Service Providers that it is Illegal for a Business to ask for monies for works they have not completed. We pride ourselves in providing memberships to fully licensed and insured professional Service Providers and anyone who has notpreserved the Service Central reputation and brand image at all timeshave had their memberships suspended and in some extreme cases terminated.
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Hello Service Central. For my business, this idea that 50% is too much to ask, I disagree with. I have a 50% deposit policy for the reason that I have to buy goods and materials that go into the finished product that the client commissions me to do. 50% doesn't cover all the materials in most cases so I am still exposed and out of pocket if a customer decides not to pay. I make sure that the customer gets a receipt for payment and that they feel comfortable with the arrangement before commencement. If the customer had to do the job themselves, then they would have to pay for the materials anyway and they are responsible for them. Some of the more expensive jobs require less deposit but with progress payments at different stages that the customer can inspect. I understand that other trades may be different and 10 - 20% is fair but who are those industries? Maybe each industry should have their own guidelines. I think this article sends out the wrong message to my prospective, current and past customers.
over a year ago by Anthony -
Hi all
over a year ago by John
As I've been caught a number of times with people just conveniently leaving off the last payment or just not paying in full, I now always ask for material cost to be payed on ordering. I give a receipt with both parties signing. If for what ever reason they don't pay up, at least I'm not out of pocket for materials. If there are reservations in paying the material cost, I've also found that I've had difficulty in getting fully paid at the end or there's some nigling discrepancy over payment at the end.
