Payment Terms

 
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Old 06-29-2006, 11:48 PM   #1
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Payment Terms


What is a good payment term that would benfit me the most and suggestions. Trying not to tie up too much money with customer. Hard to cashflow business at times.

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Old 06-29-2006, 11:59 PM   #2
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Re: Payment Terms


Never put YOUR money into someone elses project unless you are making a profit from that project.

I ad lib it depending on the project. Mr. multimillionaire might pay 50% up front. Mr. Hurricane victim, 30%. There are too many other factors involved, these are cursory numbers.

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Old 06-30-2006, 05:11 AM   #3
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Re: Payment Terms


The law here is no more than 30% deposit
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Old 06-30-2006, 09:04 AM   #4
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Re: Payment Terms


The law in Mass. states that no more than 1/3 can be collected at start..
Unless special order Materials are involved.

But mine varries also.... I just started a deposite for large jobs at signing..
(summer only) and depending on the amount... I get all materials and 1/3 labor up front .... 1/3 at half way point and 1/3 and the final at completion for anything in the thousands.... and anything small will be 1/2 up front 1/2 at end.
But now my crew is getting larger... so I might have to rearange a few things.
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Old 06-30-2006, 09:46 AM   #5
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Re: Payment Terms


What has worked out pretty good for me is I require thirds on any project over $1,500. 33% due as a deposit to get on our schedule, 33% due at half-way or no later than 7 calender days after start of work, and 34% due at completion. For jobs less than $1,500 I always do 50/50.
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Old 06-30-2006, 03:14 PM   #6
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Re: Payment Terms


10% down, 10% at completion...

You divide up the remaining 80% however you want. 1 payment at start, 10 payments during the job, whatever...

10% down makes sure they are serious and gives them something to lose if they back out. 10% at completion doesn't allow a bad customer to get in your pocket and hurt you too badly if they do off the deep end on you.

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