deposit reduction

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Vinniem

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Central Jersey
Had a customer email me today and request to have the required deposit to start his job reduced to half (from $1000 to $500) and say he'll give the remaining $500 at a latter date, towards the end of the job.

Struck me kind of odd. First time for me.

Have any of you had similar requests?
 
Vinniem said:
Had a customer email me today and request to have the required deposit to start his job reduced to half (from $1000 to $500) and say he'll give the remaining $500 at a latter date, towards the end of the job.

Struck me kind of odd. First time for me.

Have any of you had similar requests?
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The warning flag just went up, this could be a problem customer when it comes to final payment. Your are not in the credit business, if he has monney issues he should find his own money.
 
Could be someone told him that was to large a deposit for the job and he is trying to cover himself or he could have cash flow problem and this could make collecting at jobs end an issue.If you want an answer you got to ask the question,go to homeowner and ask why.
 
I would ask for a reason why he requested the reduction. In the past I've had customers do this with mixed results. Most have bit me in the butt but if this is a long time customer, then perhaps he is having financial issues.

If you do decide to halve the deposit, inform him both verbally and in writing that he is responsible for the other half at a date that you both agree on or you'll add the other half and a late fee on top of that. I would also suggest getting it noterized or have a lawyer help you draft the document.
 
If you agreed you were to get paid $1K to start the job, then the customer needs to fork over another 500 clams before you can start.

Don't back down now! It's waaaaay to early in the game!
 
Total job 2130

1000.00 upon signing of contract

$500.00 upon completion of rough work prior to rough inspection

$500.00 upon completion of finish work prior to final inspection

$130.00 balance due after final inspection approval
 
I would offer to start the job at a latter date...when the deposit moneys have been forked over :)
 
I have never asked for a deposit before the job and I would be reluctant to pay a deposit before any work is done. It is not done around here.
 
If the customer is concerned about you not starting the job after he pays, like some homowners are. Agree to the 500 deposit but make the rough payment 1000.00 and meet him in the middle.
 
Vinniem said:
Total job 2130

1000.00 upon signing of contract

$500.00 upon completion of rough work prior to rough inspection

$500.00 upon completion of finish work prior to final inspection

$130.00 balance due after final inspection approval
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I can see the customer getting cold feet about forking over almost half the money up front.Looking at your breakdown taking the 500 at the beginning and then 1000.00 at rough in (I usually get inspection first) would be a counter offer.
 
I often wonder why our industry is looked at as a cheap labor pool, rather then a respected craft, and some of this may be our poor business practices, contracting for work costs money, and asking for a hefty deposit, is a smart businness move, every project will require a different deposit, depending on material needs, and labor burdens, your in business, and the business can't continue to operate without cash flow and profits.

I sit here and shake my head at times, wondering how some are making a living, and paying their expensies with the way they are operating their business.
 
That must be real small job..you can not wire a house for that..yet you and owner must be on same page in writing..so you need to have face to face and find out whats up..make sure you are ready to give money back if you are uncomfortable with answers..there are other fish to fry..I hope yet sometimes work gets slow and tough to find if owners has got someone who said it could be done cheaper you got some issues coming..
 
Thanks for the replies guys.

I agree with you satcom.

We are in business, not charity.

The less money that has to come out of my pocket the better.

Me personally, I don't see how many contractors start a job without a deposit. (contracted work, not service calls)

But I will follow the advice and make the payment after the rough inspection 1000 dollars instead of 500.

Again, thanks to all who replied.
 
Dennis Alwon said:
I have never asked for a deposit before the job and I would be reluctant to pay a deposit before any work is done.
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Same here. If it's a big job, I'll get a progress payment after the rough inspection, but mostly I just bill when the job's done and the customer's happy.

Your mileage may vary,
 
Dennis Alwon said:
I have never asked for a deposit before the job and I would be reluctant to pay a deposit before any work is done. It is not done around here.
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We operate the same way. I do the work, you're happy, you pay, we're both happy.
 
I always get a deposit, enough to cover at least material costs. My thinking is if I get stiffed on the job at least I can still pay the supply house and I won't get a lean put against my house or something. Most supply houses I deal with want to get paid in 30 days and I don't want credit issues because of a customers possible financial problems. If a supply house shuts you off over one job, it is going to inhibit your ability to do other jobs.
 
Dennis Alwon said:
I have never asked for a deposit before the job and I would be reluctant to pay a deposit before any work is done. It is not done around here.
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Ditto Dennis, we have never recieved any deposit money up front. I would never pay anyone money up front for work they had not performed, especially 50%.
We do mostly medium size projects. We have to go by work performed or materials stored on site for our payments. If paments start to run late we can notify the bonding company or the owner and thins usually get fixed. This is always the way things have been in this type of work.
With a home owner you have a different type of situation. Some may pay a percentage down. Personally I would not because I have seen nd heard of too many cases where the person takes the deposit and never comes back to work.
 
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