Re: Down Payments?

["Jim" <alarminex@xxxxxxx>]

JW wrote:
> Hi All,
> Our contracts state that we will receive a 50% down payment upon signing
> with the balance billed after completion. Today, a new customer (who already
> signed the contract and sent a large downpayment since it's a big job)
> called very upset about the practice. He said no other vendors require it
> and that it smacks of being a fly-by-nighter. I think it smacks of sound
> money-management... but of course it made me wonder what the norm is in the
> industry so thought I'd ask for some feedback.
>
> Thanks for sharing!

I do mostly residential and small commercial. No more large commercial
and municipal ... anymore. I simply got tired of doing all the bid
paper work and then waiting for payment. However, now ALL my quotes
say, 50% at startup, 50% upon completion. If job is delayed over 30
days, 50% of the balance is due upon demand with the remaining balance
due upon completion.

What this does is as follows: In reality, if the job is going to take a
few days, I simply don't ask for the 50% and collect total upon
completion. If theres going to be a short, (days or weeks) delay I ask
for it. But ..... the important thing is that the initial agreement was
made and the paperwork "says" pay upon startup ..... just in case
there's any problem and it goes to abitration. At that rate, at least I
know I'll be awarded that much, even if the job isn't completed. The
other part about 25% if job goes longer than 30 days is included for
builders. If the job "does" go longer than 30 days, but is progressing,
I'll just not ask for it. But, if it appears as if it isn't going good,
I'll ask for it and if refused, I know it's time to bail ..... with
less loss. Equpment is always in the last stages.