This is the first time I’ve ever had a potential client query my payment schedule. I normally work on a premise of 50% non-refundable deposit with the balance due 24 hours before launch. If that poses a problem then I do milestone payment.

However, prospect came back to me today and requested the pay over a matter of months, looking at 25% of the project balance per month.

It’s completely thrown me. I do trust this person but at the same time, business is business and you’d effectively be looking at their site being live with a balance still remaining.

Any thoughts on how to handle?

A very very difficult one this one. On the one hand you obviously don’t want to lose the work but then on the other hand you shouldn’t be having money still owing when a client has received the final version of their site.

I always have a contract which fully states before even getting into what they want their site to do which states 50% up front and the final 50% upon completion of site before it goes live.

Perhaps you could write up a contract which breaks down the site into chunks and then they pay for the site in chunks?

Other than that I’m not too sure what to say, I’m sure others will have come across this before though and will be able to lend a hand though.

I sometimes do wonder if some clients have a clue about anything or whether they are just trying it on sometimes because if some money is left over then they are going to find things that they want to change once the site is live and you’ll probably never see that money as they will believe their site isn’t finalised yet.

It’s a bit like going into a car showroom and paying for half a car and saying you’ll give the rest to the dealer after you’ve ridden the car for a bit!

Wishing you the best on whatever you decide to do here. Interested to see how it all goes for you.

Best wishes,

Mark

Thanks Mark. It is a tricky one. The fact is that this client sells products, I wonder how he’d feel if a customer ordered a product but only wanted to pay 10% of the product price and the rest over months. Unless you have a credit agreement in place you’re not protected.

I think I’ll need to speak to this person rather than email, as the key I think is in the delivery.

I normally do 3 stage payments for projects but I do sometimes adjust things if clients ask and I’m happy with the arrangement - I’ve even had some clients pay me 100% up front!

With your situation I’d be tempted to consider 4 stage payments of 25%, but get the money up front before you start work on each stage. At the end of the day you’re still (hopefully) going to get paid and you’ll have a more happier customer as a result.

Sometimes you need to be a bit flexible with the way you work

I’m all for being flexible but the way they’re pitching it sounds like they want to pay in installments after the site has gone live. Therein lies the issue.

paying for something after receiving it is, by definition, credit.  since they want the site on credit you’ll need more money to cover your risk. if it’s a $1000 site paid for in advance, then they ought to be paying 4 monthly installments of $300, not $250.  obviously adjust the numbers accordingly.

That’s a sticky wicket. I suppose it boils down to the “balance” amount after the site has gone live.

If you’re not happy having a balance outstanding after go live then you’re probably best sticking to your guns and asking for your normal terms, but you may lose the client.

If, on the other hand, you want to try and keep the client then you could look at keeping overall control of the site until payment is complete. By that I mean not allowing them things Super Admin permissions so if they miss a payment then you simply go in and take the site offline until they pay.

Watch out here; if they can’t afford to pay you before site is launched then they have financial problems - so there is a chance they will default on full payment. If you’re very short of work then maybe take it on, otherwise stick to your guns.

I work with a client which generally doesn’t pay anything until around two months after delivery, sometimes later. They are atrocious payers.

Obviously there is a fair element of risk in this, but I charge late payment fees and add risk-related contingencies on every invoice so I do get a return from taking the risk. I retain ownership of all work until fully paid and usually keep server admin access as further protection. I can also roll late changes into the final invoice which is easier than raising more paperwork later.

I would prefer not to deal with this client, but so far it has worked out ok and the bad payment fees really add up. If I take a really tough line on payment, they would probably just find someone else to do the work - I would lose out, but that might not be such a bad thing.

I’ve had multiple clients paying me on installments, luckily it never went wrong (knocks on wood)

I have a special payment contract for clients who wish to pay in installments after a completed project. Basically saying the work is completely mine until all payments are received, and giving me the right to take down the site if they don’t pay. A requirement of this is that they have to use our servers for hosting their website, so we can take it down if needed.

It depends on client and project wether I charge extra if they wish to pay in installments, usually I don’t, sometimes just a couple of Euro’s because it takes more time in billing.

Well I stuck to my guns and in this case and, for the first time ever, I’m prepared to walk away from the business. I told the client that I understand his cashflow concern but that it’s not in my business practice to have a balance outstanding on a live project.

I have given both my usual 50% deposit and settlement before go live as well as milestone based payments.

We’ll see how it goes.

Well done!

Good choice Steven. Hopefully they will see the benefit of still using you for their business as it shows you have a good business head on yourself in doing that.

Best wishes,

Mark

I hope you will let us know what they decide?  Now that I have read the whole thread I’m terribly curious!