Why Payment Terms Matter
Get paid before you start, not just when you finish. A deposit up front protects your cash, filters out customers who aren't serious, and means you never pay for a customer's materials out of your own pocket.
If you're only paid at the end, you carry every risk:
- You buy the materials, then the customer changes their mind.
- You block out shop time, then the customer goes quiet.
- You finish the job, then you chase the money for weeks.
A customer who pays a deposit has committed. They show up for pickup, they answer your questions, and they take the approval seriously. Good customers expect to pay a deposit for custom work. The ones who refuse are usually the ones you'd end up chasing.
Know Your Numbers First
Your deposit should at least cover what you'll spend before the customer sees anything. Work this out before you talk to them, so you know which number you can't go below.
- Materials and outside costs: stock, hardware, finishes, outsourced work and shipping you pay up front.
- Time before the first milestone: design, setup and programming hours at your shop rate.
- Your floor: materials plus early hours. That's the least you can accept as a deposit.
- Your ask: 50% for most custom work. Ask for more when the job is material-heavy or can't be resold.
Example: on a $2,000 job with $700 in materials and 3 hours of design at $75 an hour ($225), your floor is $925. Ask for 50% ($1,000). Don't go below $925.
Common Payment Structures
Start from deposit plus balance. Change it only when the job size or the customer gives you a reason to.
| Structure | How it works | Best for | Your risk |
|---|---|---|---|
| Paid in full up front | 100% before work starts | Jobs bigger than you could afford to lose, rush jobs and online orders | None |
| Deposit plus balance | 50% to start, 50% at pickup or delivery | Most custom work | Low |
| Progress payments | For example 30% to start, 40% at a milestone, 30% at the end | Large or long jobs, installs, multi-week builds | Low to medium |
| Deposit plus net terms | Deposit to start, balance due 15 or 30 days after invoice | Customers who have paid on time for several jobs | Medium |
| Net terms, no deposit | Everything due after delivery | Only established accounts, if ever. Many shops never offer this. | High |
| Paid on pickup | Full payment when collected | Avoid for custom work | High |
For custom work, the item doesn't leave the shop until the balance is paid, unless the customer is on approved net terms.
Where to draw your line: the cutoff isn't a fixed dollar amount. It's how much you could afford to lose on this job if the customer never paid. Treat anything you carry yourself as an investment in the project, and only make it after you've weighed the risk. Below that amount, you can relax the deposit for a customer you trust. Above it, the work is paid up front or covered by a deposit.
Terms are earned: many shops never offer terms at all. Others offer cash on delivery or net 30 only after several jobs paid on time. Start every new customer on a deposit. Loosen terms only once they've earned it, and tighten them again after a late payment.
How to Bring It Up
State your terms as a matter of fact, early, and in writing. Don't ask whether a deposit is okay. Tell the customer it's how you work. Put the terms on the quote before the price conversation, so nobody is surprised.
When You Send the Quote
"Here's your quote. To book your spot and order materials, we take a 50% deposit when you approve it. The balance is due when it's ready for pickup. You can pay the deposit by card right from the approval page."
For Custom or One-Off Pieces
"Because this is made just for you and can't be resold, the deposit covers the materials we order for it. Once it's paid, it goes into the schedule."
For Rush Jobs
"We can move this to the front of the line. Rush jobs are paid in full up front, because we're bumping other work to fit it in."
For a Repeat Customer Asking for Net Terms
"Happy to. For accounts like yours we do a 30% deposit and the balance net 15. Does that work for your accounts payable?"
Keep it short. The more you explain or apologize, the more it sounds like the terms are up for negotiation.
Handling Pushback
When a customer resists, trade something else before you drop the deposit. Change the amount, the timing or the way they pay, but keep some money up front that covers your floor.
| They say | You can say | What you're trading |
|---|---|---|
| "I don't pay until I see it." | "Totally fair. You'll approve a proof or a photo before we cut anything, and the deposit only covers materials." | A proof step, not the deposit |
| "50% is a lot." | "We can do 30% to start and a second payment when you approve the sample." | A smaller first payment plus a milestone |
| "The other shop doesn't ask for a deposit." | "That's their call. We order your materials the day you approve, which is how we hit the date." | Nothing. Hold the line. |
| "Can I pay it all at the end?" | "Not for now. After a few jobs paid on time, we can talk about terms." | Future terms for repeat business |
| "I can't pay by card." | "No problem. E-transfer works too, and we'll start once it lands." | The payment method |
| "It's a big order, so give me net 30." | "We can do net 30 on the balance with a 30% deposit." | Net terms on the balance only |
If they still won't pay anything up front for custom work, it's usually fine to walk away. A lost quote costs you less than a finished job nobody pays for.
Protect Yourself
Get it in writing, start only when the deposit is in, and price every change before you make it.
Red Flags
- They refuse any deposit but want a rush date.
- They want the price broken out line by line so they can source the parts themselves.
- The scope keeps growing before they've approved anything.
- They ask you to hold or ship the finished work before the balance is paid.
- They go quiet after approving and resurface only to change things.
Habits That Protect You
- Written approval: the customer approves the quote, terms included, through the approval link, not in a text message.
- No deposit, no start: don't order materials or book shop time until the deposit has cleared.
- Change orders: any change after approval gets a new price and a new approval before you do the work. See Change Orders: How to Stop Scope Creep.
- Hold the finished work: custom items stay in the shop until the balance is paid.
- Late fees and cancellations: if you charge them, state them on the quote. Check your provincial or state rules before charging interest on overdue amounts.
- Refund policy: say up front whether the deposit can be refunded once materials have been ordered.
This is general business guidance, not legal advice. For large contracts, have a lawyer review your terms.
Setting It Up in Customakr
Set a default once, then adjust it per quote.
- Your shop default: in Settings > Customers and Billing > Deposit to Start, choose a percentage (half up front by default) or a fixed amount. It shows on every new quote and its approval page.
- Your terms: in Terms and Quote Templates, write when the balance is due and your refund policy. A template that states a deposit, like Custom fabrication's 50%, sets it on new quotes.
- Per quote: change it on the draft for rush jobs (100%), material-heavy jobs (more) or trusted accounts (less).
- Start the clock on payment: set Lead Time Starts When to deposit received, so your promised date counts from the day you're paid.
- Approval, then payment: your customer approves the quote and terms from the approval link. With Maker and up and Stripe connected, they go straight to Pay Deposit by card, or choose Pay Later and pay from the same page later. The deposit invoice is made for you.
- No deposit, no start: the job shows Waiting for Deposit and can't be started or clocked in until it's paid. Card payments clear it. For cash or e-transfer, an owner or admin uses Mark Deposit Paid, or Start Without Deposit for a trusted customer. Both are logged.
- Final invoice: it subtracts the deposit and bills what's left. On Solo and up, bill big jobs in stages, and reminders chase unpaid invoices.
On Free, the deposit is a line on your quote, and the job waits until you mark it paid.
Quick Checklist
- I know my floor: materials plus early hours.
- My default deposit is set, 50% unless I have a reason to change it.
- My terms state the deposit, when the balance is due, cancellations and refunds.
- Terms are on the quote before we talk about price.
- Customers approve through the link, not by text.
- No work starts until the deposit is paid.
- Changes get a new price and a new approval.
- Finished custom work stays here until the balance is paid.
- Terms only for customers who've earned them, and never more than I could afford to lose.