Safest method of payment

Galbin

I have a lot of online clients and normally work via websites where the client places the money in 'escrow' and it is automatically released once it is done. Hence, it is as safe as houses.

However, recently I was been contacted by a client for a massive job (worth a lot of money) who wants to pay me via instalments. I have never done this before and it seems risky to me. I mean, what is to stop her withholding payment after I have done all the work?

I was thinking I'd request a large deposit as security for the work done so that even if the client didn't fully pay up, I'd be okay. However, I am wondering about the instalments bit.

Would getting a direct debit be a way to ensure that payments are safe? Or is it a standing order that only the recipient can cancel?

I wouldn’t be worried if this client was a company or business, but it is literally one person.

Is there any way to guarantee a transaction like this?

I'd really like to take this project on, but just don't want to lose out on thousands because I didn't use a safe payment method. When I have worked with individuals before, I have always used the escrow process.


Thank you very much.

The Apprentice

Well possibly she wants to do escrow payments VIA multiple installments rather than just 1 big lump sum..

This is personnally my favourite, my mam was shall we say ripped off by a cowboy builder with a lump sum payment with "little" or poor work done.. there was no come back, no money to finish the build etc. The kitty was dry so to speak --

I previously suggested a lump sum up front of 25% for original materials works and contingent on another 25% after .. Eg

Kitchen Roof Repaired 25%
Kitchen Installed 25%
Kitchen Floor and All snag list finished .. final 25%

Perhaps it is this method which might suit u both ??? She,s very low risk that you might bail with thousands.. Your happy as long as you agree to the terms and follow them to a tee..
Although u might lose money on first 3 payments and make ure profit in the fourth you will have to do your sums on this so both partners will be happy.

I have a previous business plan with another 2 guys in college with something similar to this in relation to the building trade to ease the pain on consumers (should things go wrong) and also builders who were afraid there would be no money left to finish the job ..

Build your profit into the 25% rather than your 100% and you,ll be covered..

Cheers

Galbin

The Apprentice - Thanks so much for your help! Do you know which is safer for a business - a direct debit or a standing order? Which should I request?

prospect

Galbin wrote: »

The Apprentice - Thanks so much for your help! Do you know which is safer for a business - a direct debit or a standing order? Which should I request?

I have contracted out work on the basis outlined above.

Basically a schedule was agreed in writing and signed by both parties:

1. Downpayment - 10%

2. Completion of stage 1 - 20%
- Upon completion contractor requests payment before moving to stage 2, client approves (or requests corrections/improvements) and releases payment.

3. Completion of stage 2 - 20%
- Upon completion contractor requests payment before moving to stage 3, client approves (or requests corrections/improvements) and releases payment.

4. Completion of final stage - 20%
- Upon completion of the final stage contractor requests payment, client approves (or requests corrections/improvements) and releases payment.

5. Retention payment - 10%
- After X period of time, and all parties are happy, the final 10% is released to the contractor.


HTH.

MOH

Galbin wrote: »

The Apprentice - Thanks so much for your help! Do you know which is safer for a business - a direct debit or a standing order? Which should I request?

I wouldn't consider either of them as a guarantee of being paid, since the customer can cancel them.

Couple of suggestions of things to consider here.

But really, I'd say a large deposit up front, and a detailed contract covering exactly what is to be paid when, in return for what deliverables, and making it clear that ownership only transfers after the final payment.

Pretty much along the lines of what prospect said.

Galbin

MOH wrote: »

I wouldn't consider either of them as a guarantee of being paid, since the customer can cancel them.

Couple of suggestions of things to consider here.

But really, I'd say a large deposit up front, and a detailed contract covering exactly what is to be paid when, in return for what deliverables, and making it clear that ownership only transfers after the final payment.

Pretty much along the lines of what prospect said.

Are there any places where I can get sample contracts? I've never done a contract up before because the sites I used had automatic contracts through the escrow process.

Thanks!

The Apprentice

Galbin wrote: »

The Apprentice - Thanks so much for your help! Do you know which is safer for a business - a direct debit or a standing order? Which should I request?

Well i would tell you get cash persay, but a cheque (cleared) i would go with.. Direct debits/standing orders are fine and dandy but things in business change daily so direct debit may come in too early or perhaps too late.. u might not have the work done and the client may feel your taking payment before the process is finished..

But i mean the contract doesnt have to be "harvard" edition it really just needs to layout what you and the client are agreeing too.. Have the basics down, price, payment, between who and for what work etc.

If he or you are fighting over petty things at the start of the project i wouldnt particularly take him on but thats your own judgement not mine...

At the end of the day, you want to get paid for work and he or she wants work done.. so helping each other and having mutual respect goes a fair bit

Hope it all goes smoothly anyway bud best of luck