Billing Schedules
A cabinetmaker considers whether to adjust his usual "50% down, 50% on completion" by breaking out installation as a separate charge. February 8, 2008
Question
I've been bidding jobs until now as follows: 50% due at start of project and 50% due at completion. Lately I've been toying with the idea of estimating my installation time. I got burned on my last job because of other subs not doing their jobs right or on time. I've been thinking of charging a set price for the cabinets and then estimating, rather than quoting, the time it will take for installation. I would then charge 50% at the start, 50% at time of delivery and installation due upon completion. Does this make sense to split out the installation costs? Does anyone else do it this way?
Forum Responses
(Business and Management Forum)
From contributor V:
I have considered doing something similar, except the balance is due upon completion. If you go out with the cabinets, then they will want to pay both the cabinet balance and the install with the same check. I realize you are focusing more on getting better pay for the install and not paying for other subs' mistakes.
From contributor T:
We normally suggest that you split out the installation as a separate item due upon completion. The cabinets we would suggest that you consider 50 down and the remainder upon delivery. This gives you a little leverage to collect (you can always take them back to the shop) before the cabinets get fixed into the structure.
From contributor V:
I do completion because if you do on delivery, that means you have to get two checks in one day. Wait until they get there with the check. If they are late, you are losing money. If you start before they get there, you're still in the same boat as just plain 50-50 and you lose the leverage.
From contributor D:
I've switched to 50/50 on the cabinetry, with a separate installation fee (which is not taxable in Illinois). This helped pull the cash flow up a little sooner. On some bigger commercial jobs, I've done 1/3, 1/3 and the final third upon delivery. This spreads out the cash flow, but also allows me to get 2/3 of the payment before I deliver, instead of 1/2. When I was an interior designer and purchased furniture through the design centers, they usually demanded full payment up front when the order was placed, so I don't feel so bad asking for my terms.
From contributor P:
On cabinetry, I factor it all in and require a 40% deposit before scheduling, 30% after the approval of colors, and 30% at the time of installation. I used to do the 40% at install and 30% upfront, but changed that a few months ago. I used to not install, subbing it out instead. But now I install about half of it. On stuff that we have no responsibility to install, I do 50% to schedule and 50% when they pick it up or we deliver.
From contributor B:
I find 50/50 leaves too much at the end. I do three draws. 25% for materials, 65% delivery, and 10% the following week after I'm done incase I need to do any door or drawer adjusting.
