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Deposit or no deposit??

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Discuss Deposit or no deposit?? in the Plumbing Jobs | The Job-board area at PlumbersForums.net

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R

Rickster123

Hi guys
Im looking for abit of advice really. Do you take deposits from customers on large installs (ie in excess of £1000)?

I have been taking a deposit for some time now and not had a single query on it until today. Spoke to the customer on tuesday and he was happy to pay a deposit of 50% of job total. Now hes emailed saying this wont happen. Im only a small business and cant really afford to take the risk of a bouncy cheque. (which has happened in the past!)

So whats the norm out there?? Any replies or info would be great.

Thank u!
 
Just an update. The job has now been cancelled by the customer. Bit of a shame but i just dont have £1250 spare to take a risk on. fed up now!
 
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any jobs over 400 quid i reserve the right to ask for up 2 50% deposit. I know its hard losing business but its harder getting your doh after youve installed.
 
I never take a deposit and ask for monies when I've finished the job. If lasting over a month (e.g. long job or working around 5 days over 3-4 months) then I arrange to send an invoice and be paid at the end of the month.

If I don't trust the customer I walk away from the job.

This is how I've been treated over the years and don't expect my customers to be treated differently to this system.
 
fair play dontknowitall, wish it was like that is south london, im a trusting bloke like many, moving to the south west so hopefully can send an invoice rather than feeling like a collection agency.
 
If its a large outlay on materials and I thought customer may not pay I collect materials and request a cash on delivery type arrangement, at least if i do get stung i'm not losing money on materials, its bad enough not getting paid for your time but when you're actually paying for their nice new boiler or whatever its quite sickening
 
I haven't done it yet, although I was thinking of doing it, but I have a program which lets me send a template solicitors letter and if they ignore that then I can get the debt collectors in, would also threaten them with interest aswell, I have this company advertising on my invoices aswell.
 
I quite agree GMac.

I've just walked away from a customer (a rich landlord who was moaning about money) and I didn't think he would pay me. Have already bought the electric shower and had unpacked it so probably won't get my money back now.

But ...

I might fit it for my neighbours for nothing - no charge for the shower or my plumbing. They've spent loads of money on plumbing over the last 2-3 years and the shower I fitted froze :-( It was their fault and they're not blaming me.

But I'd love to tell the above landlord that I'm fitting it totally for free for someone else.
 
Its very hard to lose a job or walk away from a job with work being as thin on the ground as it is. I did explain to customer the reasons why i needed a deposit and of course a receipt for the money taken wouldve been given. But he decided he'd cancel the work at the last minute.
AGGGHH!!! Time for a beer and a cancer stick!
 
Never asked for deposit and only times ive had hassle with money on private work is when its under £100 , different story as a subby tho
 
dontknowitall said:
I quite agree GMac.

I've just walked away from a customer (a rich landlord who was moaning about money) and I didn't think he would pay me. Have already bought the electric shower and had unpacked it so probably won't get my money back now.

But ...

I might fit it for my neighbours for nothing - no charge for the shower or my plumbing. They've spent loads of money on plumbing over the last 2-3 years and the shower I fitted froze :-( It was their fault and they're not blaming me.

But I'd love to tell the above landlord that I'm fitting it totally for free for someone else.
Click to expand...

I like your style lol, altho 9 times outta 10 its the ones who seem to have a few quid are the problem payers,
 
APPlumbing - don't be hard on yourself.

Could have been he was going to delay payment in any case and the reason he stopped you working was that he didn't have the money to pay you in the first place.
 
An old plumber said to me many years ago

''you'll never make a descent plumber'' but apart from that he also said

Always take a deposit, it gets the customer used to parting with their money.and that is so true, agreeing to a price and actually parting with a big chuck of wod is two different things, also spreads grand total so does not seem so much and gives the job material value

You are more likely to be paid in full if you take deposits and stage payments,the bigger the final payment ,the bigger the chance of it not all being there
Nothing to do if you need it or not just good safe business sense

imho
 
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APPlumbing said:
Its very hard to lose a job or walk away from a job with work being as thin on the ground as it is. I did explain to customer the reasons why i needed a deposit and of course a receipt for the money taken wouldve been given. But he decided he'd cancel the work at the last minute.
AGGGHH!!! Time for a beer and a cancer stick!
Click to expand...

You could look at it as you've had a lucky escape and he doesn't actually have the money to pay you.

All these cowboy builder shows and how to find a good tradesman guides etc are telling customers not to part with any money up front because a legit business should have sufficent resources to supply materials and complete job before payment, they don't promote the fact of the number of tradesmen gettin screwed by customers.

Think dom littlewood should do a bit of investigation from our side for once and chase our debts up
 
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I agree. I think Dom Littlewood and Mat Allright from rogue traders should perhaps try doing a days work for a living full stop!
 
it must be extremely difficult for both sides at the mo, the tradesman is scared to gett bumped for labour, but more worryingly after shelling out for materials, but on the other hand the customers are getting advised about all the dodgy workers who are out to bump them and wont shell out a deposit, i only work for and get work done by colleagues so it is never a problem, i put my cars into mates garage and say its making a funny noise fix it, and he does and tells me the price, i pay it without asking what was wrong as i trust him, he knows when he has to phone me before fixing etc, and if im fixing sis in laws boiler i buy the bit and she pays me for the bit end of, but im lucky thats all the type of work i do and get done, dont fancy tring to make a living self employed, only thing to do is use your instinct and as others have said you will never really know but just convince yourself that you walked away lucky!!! a decent customer should be ok paying something towards the material on delivery or day one, as a gesture of good faith
 
As it has been said before ,there are many,many more cowboy customers than there are cowboy treadesmen

imho
 
More cowboy customers than tradesmen?

Never thought about that but it does make sense.

imho ...

... naturally.

Still wondering about this deposit business. Not taking it shows your trust in a customer, the fact that they know you're not going to walk off with their money without doing the job. I do see the arguments FOR taking a deposit though and they make good sense.
 
Trust works both ways, thats why I work on the cash on delivery type principle for large outlay on materials, the customer trusting me to carry out my work correctly and me trusting the customer to pay me labour cost on completion, as kirkgas said, a decent customer doesn't mind
 
How can you afford not to take a deposit? Unless you have an account at the suppliers. Most suppliers no longer take cheques and if a customer pays by cheque at the end of the job it can be another week before you have cleared funds.
 
APPlumbing said:
How can you afford not to take a deposit? Unless you have an account at the suppliers. Most suppliers no longer take cheques and if a customer pays by cheque at the end of the job it can be another week before you have cleared funds.
Click to expand...

Thats why I make sure they know it strictly cash on first day, I use the account for materials initially, then return that afternoon of next day and pay money off the account, any mark up covers stock for van, it works for me
 
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had a job passed on to me from some one from here !
went round and did survey ,total cost was 6.5k out of it it was about 3.8k materials
customer try negotiating price i did not drop ,then he agrees and gives me go a head and start job next monday
it was Tuesday i thing ! Tuesday I thing I was going to go to order it all next day just to make sure is all there on time but something stopped me and I went to work and I was going to order about 4pm on wednesday ,then I get message do not come on monday as we change our plan we are going to use some one else ,and I said thank you I just ordered 4k materials ........(which I did not) any way what if I did and cylinder was going to be horizontal ,special order no cancellation , I thing I am to start collecting 1k for deposit as I did learn from that job even I did not loose any money
 
Lets look at this from a different point:

I had an extension built, the builder wanted staged payments, large amount for the groundworks, doors to the extension were £2000k wanted payment on arrival. Build took quite a while and I held back the final payment until the building insp turned up signed it all off.
I didn't see any of this as a problem. We were both happy.

Had the driveway and patio done in block paving, small company (2 young lads) just starting out. They were recommended but wanted money up front for the blocks. Not happy with this, I called the supplier and paid for the blocks up front myself.

I then paid them as they asked for money, eg. rubbish removal, sand etc.

The long and short of it is, I don't think paying for the materials up front or on the day they arrive is a big issue. I don't think it is unprofessional to ask money for the materials. Its not just plumbers that do it.
 
APPlumbing said:
How can you afford not to take a deposit? Unless you have an account at the suppliers. Most suppliers no longer take cheques and if a customer pays by cheque at the end of the job it can be another week before you have cleared funds.
Click to expand...

Always try to build up a bit of capital for your business, I know it is hard ,especially when are a one man band, work not to clever and younger with young family ect but it will increase your profits, you should not be relaying on earnings from the job you are on to pay the immediate bills, I am not knocking it, I have had to do this in the past but it only has a negative effect on your income, you miss out on extras because you want to get the job done and get that final payment or you can not afford the materials, you repair things instead of replacing as it is a lower out lay but also less profitable
Customers can somehow sense it and request extra things done before you will get the payment, you can not be firm with them as you fear it will hold the payment up, it goes on
As said ,it is easier said than done but if you can build up that little cushion, you will see profits increase...it is your cushion though not the customers mind, do not use it to their advantage..as said take deposits and stage payments as if you had nowt

imho

ps

I know of notone Plumber who has not been taken for a large amount, if it has not happened to you yet it will, fact of life ,no matter how careful you are, not matter what checks you do, at the end of the day the customer may want to pay you but can not to many unforeseen reasons

Your job is to minimise that damage when it happens and one of the ways is to take stage payments


 
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I always have and always will ask for a payment to cover materials on larger jobs. Never had a problem with customers paying for materials up front then rest on completion of job. their still is a 2 way trust as your hoping to get the rest of payment when you have done. Even that way you could still end up working for nothing if customer doesn't want to pay, but at least your not out of pocket for materials. It would still be the same for close friends or family, it works for me.
To be honest if they don't want to pay a deposit, they don't trust you or they wasn't going to pay at all.
 
Don't take deposits, although for the first time I will be on an upcoming job, done work a couple of months back for same people and were slow paying, so intend to get materials money on day 1.
I do ensure stage payments on bigger or longer jobs. Its all about keeping the cashflow moving.


I think I will move more towards taking deposits to cover materials. Safety first and all that. Been touched three times over last 6 years, luckily not large sums, but have taken some form of payment in kind, if you know what I mean. :) Postcrete was a wonderful invention.
 
dont know how the big boys like dolphin bathrooms and british gas able to get full payment from custards before an installation job and then have them wait weeks for an installation date? I would always take for materials and my labourers wages before taking on central heating installation work, at least worst came to worst i would only lose out on my labour
 
We routinely take deposits - more for bathrooms which are costing in excess of £5k AND involve booking in other trades - so it is not just to cover materials - we need to know the customer is not going to cancel at the last minute and mess up the diaries of a whole load of busy tradesmen.

We have often NOT taken deposits for smaller jobs and heating installations but we are increasingly taking deposits for all jobs over about £1,000.
The reason is because sometimes we have to wait an unreasonabe amount of time to be paid and have to chase it up several times.

When we take on a job we make it clear - in writing - that we expect payment on the DAY of completion - but surprising how many people think this means they can send a cheque weeeks later.

I can understand a customer worrying about giving a deposit - I see a couple of ways around this:
1. Get them to order and pay for the materials with your supplier - then you are not so out of packet and you know they are serious.
OR
2. Set up credit card facilities - so customer knows if they pay by credit card they have that protection. BUT this does have costs to you.
 
ive very seldom asked for deposits it depends on the customer realy in thiry odd years self employed i think ive had 5 bad cheques and three of those were paid second time round one i had to go to small claims to collect and one i lost completely generally people are honest but i dont work for super rich who are the worlds worst payersif youve got accounts with merchants this gives you breathing space to collect monies in
 
stick to your guns whatever-may, those who wont be happy paying deposit either watch too much t.v. or wont pay without hastle anyway.
if they have not got the money, tell them to book the job when their ready, simples really.
 
It all depends how you wnat to run your business and whats right for you, I prefer to cover myself as much as possible especially now with money and work getting harder to come by,
 
I always ask for cost of the materials up front, if they are unwilling to pay anything upfront I will just walk away from the job. 99% of my pj's are word of mouth really and find the few customers that do infact get you from the gas safe website tend to be timewasters.
 
stage payments are the best, 20% deposit, 40% on delivery of all materials and 40% on completion. Always sign a contract, theres a few sample ones on the net. If their not willing to sign contract and stage payments walk away. Make your jobs and payments as clear and hassle free as possible. If it's a small job, under 300, send email with estimate and do not start work until you receive confirmation email from them quoting estimate number and amount.
 
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