Whether you’ve a designer, developer or client, it’s likely that you’ve agreed a deposit of 50% before work begins.  This makes some financial and business sense; the designer / developer needs your financial assurance that you want to go ahead with the agreed project, and the client need the security that they’re going to see something in return for that investment, meaning the client will then pay the rest.

But why 50%?

Our clients know that, on the whole, we only ask for a 25% deposit upfront, with part payments (again, usually 25% increments) within 7 days of completion of the agreed portions of the project.  Through our initial quote breakdown and project specification, we make it clear when these payments are due and, depending on the contract, these payments typically signify the client’s agreement to that portion of work.  As such, it focuses the client’s mind to a specific portion of the project, requires their feedback to ensure they’re happy with the work and helps them attribute a financial “value” to it.

Some clients are dubious about giving 50% upfront, and we understand this.  We’ve had clients who have paid 50% with a designer or developer, only for said person to take the money and run.  As such, the client is a little nervous about being stung, yet are put at ease with our arrangement.  It helps build trust for both parties to ensure the client gets the work they want, and we get the agreed payments.

There’s also a financial benefit of this practice.  Small businesses and individuals can suffer from cashflow issues, especially in the current economic climate.  Breaking down the payments into smaller installments allows clients to pay for a project that otherwise would have been too costly, resulting in them walking away from the project proposal.  Smaller payments means a reduction in undue delays in receiving payments, keeps the project on track and means that everyone is happy.

Yes, we require payment within 7 days, which seems quite a strict reuiqrement – but because the client has a clear payment schedule (of smaller payments), they’re able to ensure their funds are ready in time.  It also ensures the project continues moving forward, and the clients sees progress as they pay.

We never deviate from the above formalities – even with well established clients.  This may seem inflexible, but as with any good business relationship, clear terms to cover the formalities from day 1 ensure everyone knows where they stand.  It saves the tricky formality of having to later discuss and chase payments with the client.

For us, it works well and, to date, we have never had a late payment or issue from using this process.