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Discussion Starter · #1 ·
I have a relatively new company that primarily does low voltage cabling - structured cabling. Up until this point, the jobs have been lower than $10,000 in which we have completed the work, invoiced, and was then paid on the work completed. We just received a large job, over $100,000 total with materials and labor. What are the normal payment terms to ask for? I was planning on requiring 50% on acceptance (deposit), 40% when job is half over, and 10% when work is completed. The job will last approximately 3 months, so it is a relatively small timeframe for monthly billing, which is why I thought billing the 40% when job is half completed was good. Ideas?
 

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Depends. How are they paying you? Assuming by the total of the job, they are financing it with the rest of their project. For me, that's sends up red flags to expect credit lines and AIA documents. That's automatically 10 additional hours of labor for getting docs notarized and signed. Then the bank says how you get paid, not the owner or GC.
 

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Discussion Starter · #4 ·
There is no GC. The entire job is strictly to upgrade the cabling to CAT6. It is not being financed, it is being taken out of their budget, so the "owner" is paying directly. It is for a hospital.
 

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Then I'd go with the terms you mentioned but do it 50/30/20 instead of 50/40/10. Some customers get nervous paying out 90% and the work isn't done and honestly I understand why.
 

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SunPlug said:
I was told in some states that the max down payment is 10%.
That's asinine so you're suppose to front the cost of materials in good hopes the client doesn't screw you?
 
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I have a relatively new company that primarily does low voltage cabling - structured cabling. Up until this point, the jobs have been lower than $10,000 in which we have completed the work, invoiced, and was then paid on the work completed. We just received a large job, over $100,000 total with materials and labor. What are the normal payment terms to ask for? I was planning on requiring 50% on acceptance (deposit), 40% when job is half over, and 10% when work is completed. The job will last approximately 3 months, so it is a relatively small timeframe for monthly billing, which is why I thought billing the 40% when job is half completed was good. Ideas?
25% due upon acceptance for mobilization and material procurement
25% due when materials are received at the site and scheduled work commences
35% due upon completion of cable installation and rough inspection.
Balance upon completion and acceptance by use for the benefit of the owner.
 

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It's very simple. Typically large scale jobs are all requisitioned based on the amount of work completed, payment is relative to that. And there is generally no upfront capital by the "party" involved.

You can submit weekly or monthly requisitions based on the amount of work completed by your company. Terms of payments can be anything both parties agree to.

Some upfront capital can be in your terms along with for example after 25% work completed x amount of $ is to be paid.

Got it!!
 
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