Taking deposit on jobs

[hammers4spanner]

My local rag had article about how a local builder went into liquidation after taking a large deposit on a job. End result the customers are skint and left with a property in disrepair.

The comment section has remarks about how any decent company would never take a deposit. Also how builders have accounts and they should foot the costings etc.

Still makes me wonder how customers minds work at times .

 

[Harvest Fields]

Always take a deposit.

 

[Millsy 82]

I've always taken a deposit and most people understand.

Had a few people question it when I explain to them I'm a small company if i get taken for 2k it could mean i cant pay my mortgage or Bill's for a month.

On the flip side though have you ever asked a builder for a deposit? I very rarely do work for builders as not 1 will pay a deposit if I do ots direct for the customer.

 

[townfanjon]

I am pretty fortunate, I know all my customers and don’t necessarily go looking for new ones so rarely have to ask for a deposit.
However for most of you guys I would definitely ask for a deposit when you work for someone you dont know .

 

[hammers4spanner]

Always take a deposit.

This wwas the funny bit as anyone who said take a deposit was lamblasted about poor cashflow.

 

[Harvest Fields]

This wwas the funny bit as anyone who said take a deposit was lamblasted about poor cashflow.

As a 1 man band you will
Always have bad cash flow. Even if all your customers pay on time.

 

[Millsy 82]

My way of looking at it is

You book a holiday you have to pay a deposit.

You buy a car you pay a deposit you may not get the car for a few months though.

You buy anything in shops you pay before you leave.

Why should trades be the only thing that have to offer people credit (as that's what it is) and hope they pay on completion.

 

[snowhead]

If all customers paid in full on the day of invoice, then small traders would have a better cashflow.

If all trades turned up on larger domestic jobs on the day they were supposed to and did what they'd been asked, then jobs wouldn't drag on longer than expected.

If customers didn't change thier mind part way through.....

If small traders charged a lot more for their work and built up a decent bit of cash, then deposits wouldn't be needed but of course the customer would pay more.

Of course none of the above will happen.

If you buy a house you have to pay 10% at Exchange (or an ammount agreed by all parties) and don't get access to the house.

If you buy Cars, furniture and a lot of other goods you usually have to pay a deposit.

I'm sure I had to pay a deposit at Boots when I had my last pair of glasses.

 

[Welder]

Fact is, even with the most honorable of intentions, **** happns. I only started taking deposits when a customer suddenly died on me. I was left with specically ordered kit I could not return and it took me 9 months to flog it to get my money back - meaning in real terms I lost out.

Since then I take a deposit of all materials & sub contractor money. Only three have ever queried and I walked away.

 

[Deleted member 96286]

I always ask for a 50% deposit when the customer signs my paperwork and this is clearly detailed in my terms and conditions of sale, as well as their rights to a cancellation period. The balance is payable upon completion and I usually take this on that day via a card machine.
A lot of the bathrooms I've worked on can take up to 2 weeks to complete, and the materials I have to buy are very expensive. I also don't have an income for those two weeks until the job is completed, so a deposit covers the cost of the materials and keeps me ticking over until the job is finished.
Far bigger home improvement companies here all take a deposit, so it's common practice.
As long as you protect yourself and include the consumer rights act 2015 with a customer's right to cancel, you're doing everything legal and above board.

 

[Millsy 82]

British gas take a deposit I dont think they have poor cashflow. Why cant we? I've only ever had a couple of people question it.

 

[Harvest Fields]

British gas take a deposit I dont think they have poor cashflow. Why cant we? I've only ever had a couple of people question it.

You have to nowadays.