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deck aficionado
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How do you guys invoice? I used to do 50% up front and the remainder at the end - realized quickly that wasn't a good idea.

Now we do 50% up front, 25% when we complete 75% of the job, and the remaining 25 at the end. But I'm not liking this now either. Had a bad string of clients holding onto that final 25% for whatever reason so I'd like to change our billing so that we only have maybe 5-10% exposure, hell paid in full would be nice too.

So looking to steal some ideas - what ya got
 

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50 down, 50 the day we complete.
I do not invoice residential customers. I let them know the day I will finish and show up to be paid.
 

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For a deck, I would be full amount of special order material when ordered. Then 50% at start of project, 40% to 45% once decking was completed and final once inspection is complete.

It seems the bigger the final payment, the slower it comes. I leave as little as possible for the final.Heck, we just started a big project north of 200k and the final is still under 3K.
 

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It depends on the size of the job, small jobs 10% at signing, 50% at start & 40% at completion. This works as long as 60% covers all job cost including labor other than overhead and you can absorb the 40% hit if things go bad.

On big jobs I want the final to be no more than 5% of the total. If the customer doesn't like writing that many checks fine, pay up front. If you leave a big amount for the final payment I guarrantee you will get burned sooner or later, it doesn't matter if the job is done to perfection or not.

Make sure you spell out the payment schedule in detail so customers have no excuse. This should be done in writing or email a pdf. If you've done this you should never have to go knocking on doors for payment, your check should be taped to the back door on the scheduled date of payment due.

Never be afraid to pull off a job if payment doesn't come according to schedule, I've done it a time or two & you'd be surprised how fast that check appears when work stops.
 

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John Hyatt
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We do a lot of things the same Al.

50% up front, 50% on the DAY of completion . If the job is bigger than $ 15,000 I break it up in threes with the final payment around $1,500.

I have always done it that way doing Decks beginning in 85 when I started my LLC.

A couple of times I have pulled off the Job if the second payment had not come.

JonMon www.deckmastersllc.com
 

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I break it up based on how long I'll be on the project. Minimum 10% up front just to get on the schedule.
Decks usually are 3 payments. Deposit, completion of framing, substantial performance. Substantial performance is the term used in the provincial lien act. Means the project is able to be used for its intended purpose. Once it's done I get that check. If there's minor deficiencies, they get fixed AFTER I get that check.
Haven't had a problem yet.
 

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Talking Head
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5,388 Posts
This is one where there was a couple week delay between contract and start date. I collected the second check the day we started.

Article 5. Payment Procedures
5.1. Down Payment. Upon Owner’s execution of this Contract, Owner
shall pay Contractor $4,876(20%) for design and mobilization of the Work.
5.2. Progress Payments.
 Payment 2 $6,095(25%)
▪ Due prior to commencement of the project for purchase of
materials and subcontractor deposits.
 Payment 3 $4,876(20%)
▪ Due after demolition, foundations and framing are substantially
complete.
 Payment 4 $6,095(25%)
▪ Due after the decking and railing is substantially complete.
Owner shall pay Contractor the full amount covered by the Request for
Advance within 1 calendar days from the day it was presented.
5.3. Final Payment $2,438(10%)
 

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Most of our projects are $30k -$60k so they're broken into milestones, probably 8-10 pays. Milestones include:
Deposit
1 week before project start
Decking on site
Frame complete
Decking installed
Trusses on site
Roofing installed
Rails on site
Completion of rails and stairs
Final payment (5-10%)
 

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Deck Parts Retailer
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3,108 Posts
This week we are doing 3 12x14 no money down and 2 40kdecks w/ only 5k down between them.
so for 96k worth of work I have 5k down
I will get every dime w/no issues by the end of next week

Even though reviews might say otherwise. and of course there will be no reviews about any of those decks.
But I will post the pics here.
I just don't have the time to run around and collect all those partial payments.
My guys the carpenters collect the money, because they won't get paid if they don't bring the money to me
 

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In Calif. we are limited as to what and when we can collect. Max deposit is 10% or $ 1000, whichever is lower. I usually get 10% anyways. Progress payments have to match performance or delivery of materials. On a large project, I'll get a payment for completion of footings, delivery of materials, completion of framing, and completion of decking. I work it out so that there is no more then 10% left at the table. This has worked out well and I am no longer financing jobs. Of course being retired also means I am only financing my own projects.
 

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The Ultimate Wire Hider
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Had a bad string of clients holding onto that final 25% for whatever reason so I'd like to change our billing so that we only have maybe 5-10% exposure, hell paid in full would be nice too.
It sounds like you have a collection problem more than you have an invoicing problem. You need to hire this guy:
 

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Haven't had a problem in 2 years.
Now have a wealthy paki customer (thinks he's slick and I'm a redneck dumbass)who want's to play emotional games for only $2k on a $26k total project.
He'll pay.
We have mechanics lien laws here that work fairly well.

I really hate collections, and I don't have many problems....also none.

Potential Internet and social media exposure can be a strong motivational tool.

I have better things to do and will hand it over to friends that enjoy this game.
 

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Deck Parts Retailer
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3,108 Posts
Haven't had a problem in 2 years.
Now have a wealthy paki customer (thinks he's slick and I'm a redneck dumbass)who want's to play emotional games for only $2k on a $26k total project.
He'll pay.
We have mechanics lien laws here that work fairly well.

I really hate collections, and I don't have many problems....also none.

Potential Internet and social media exposure can be a strong motivational tool.

I have better things to do and will hand it over to friends that enjoy this game.
In Michigan the small claims limit is 5,000, you will find this is the better avenue. Although I don't like to take much down the 1st sign of problems we do:
1) get cc info for all clients, this is where it pays to have cc processing ability, make sure in your contract it states that: customer pays for processing fees, usually between 2-4%. Once armed w/cc you can charge it because you have a contract.
2) Start asking for payments until the balance is below 5,000 regardless of what the contract says
3) take them to small claims. It it's amazing the amount of stupid, dumb reasons these people try to come up with, but the courts, are mainly concerned with: were you hired to do work?, did it pass inspection?

I haven't lost yet in small claims, and usually get costs added in.
 

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All my jobs are set up different, but on most occasions I leave the job with the last check. For this to happen, there needs to be no loose ends. Also, the customer has to know you intentions. They need to here you say on a few occasions that you will have the invoice on the last day, and know when that will be.

If I am unsure about someone, I will ask if the will be able to take care of payment on the day of completion during the bid.

This doesn't work for home owner associations, land lords and other similar situations.
 

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GC/carpenter
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14 years in business I've never had one problem getting paid. It's against the law in Cali to take money upfront. I can't collect for materials without the materials being on the job first. It's called "frontloading jobs" and is cause for disciplinary action by the contractors board.
 

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Contractor of the Month
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14 years in business I've never had one problem getting paid. It's against the law in Cali to take money upfront. I can't collect for materials without the materials being on the job first. It's called "frontloading jobs" and is cause for disciplinary action by the contractors board.
Do you work for builders? I've never had problems being paid by homeowners, but I've chased builders and businesses.
 

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GC/carpenter
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Do you work for builders? I've never had problems being paid by homeowners, but I've chased builders and businesses.
I'm sorry, I should of specified. The only time I've ever been screwed was from another contractor. Never a HO.

I'd also like to add those license laws I posted above are for prime home improvement contracts, not agreements between two contactors.
 
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