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Charging For Work - Deposits

Discussion in 'General Business Forum:' started by rach27, Jan 7, 2011.

  1. rach27

    rach27 Member

    Hi guys,

    Just thought I'd ask for your thoughts on charging a deposit for projects to cover against cancellations of the project by the client or if you can't make contact with the client and the job doesn't get completed, etc.

    Is a 50% deposit too much? Although on big website projects my thinking is to have an initial deposit, then a payment to made before the website goes live and the final payment once the site is live and all work is complete.

    What's your thoughts? :icon_smile:
     
  2. Stationery Direct

    Stationery Direct Administrator Staff Member

    Yep sounds perfectly fair to me, a customer not prepared to pay an initial deposit is not the type of customer you want really.
     
  3. rach27

    rach27 Member

    Thank Boss Hog. I think it's fair... I guess I was a bit worried that it may scare off potential clients but you're right... if they're not willing to pay a deposit then they're not the client I would want.

    I recently had problems with a design company where I did a decent sized website and although it was agreed that payment would be in stages they gave me the run around and seemed to think that although my final invoice was really overdue it wouldn't matter because their invoice to the client wasn't due for payment yet. It all got sorted out in the end after I had to lean on them but I learned from it. Have a more formal agreement in place, stick to it even if they try to bend the rules and refuse to release the final work if they haven't paid the staged payments. I was wrong to trust them with this size of project even though I'd worked with them before.

    I don't want to make similar mistakes with direct clients.
     
  4. Stationery Direct

    Stationery Direct Administrator Staff Member

    Exactly, decide on your terms and stick to them.

    In my experience the ones not willing to pay an initial deposit are usually the ones that take ages to pay at the end...if at all. I have had loads of situations where we have started a job, 3 days later they get a better quote and hey presto cancel the order.

    We actually insist on payment in full up front now, but luckily we are in a position where we can afford to lose the customers not prepared to do this...hence zero bad debts last year.
     
  5. Minuteman Press

    Minuteman Press Moderator

    All sounds fine. We generally charge 50% deposit for new clients - 100% for private individuals.

    With web developments we charge on a milestone basis.

    Worth using a reliable credit reference agency also.

    As Bogg Hog says - those for whom deposit is a stumbling block will be a problem later on - better to address front end, than work at a loss.

    Textbook is for the deposit taken = direct costs covered.
     
  6. Stationery Direct

    Stationery Direct Administrator Staff Member

    :icon_thumbup:
     
  7. Agree with everyone here, I was thinking about the same thing... I have just completed an entire project without payment at the moment and don't have a contract in place. Something I just need to get done asap.

    I don't think 50% is too much at all, and agree that if they can't pay that then it would be a nightmare project from the start in my opinion.
     
  8. rach27

    rach27 Member

    Decision made... 50% up front! Working on a new set of terms now which will include this. These will go out with every quote so the client knows the deal from the start.

    Thanks for your help guys :icon_biggrin:
     

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