How much deposit to ask for, and how to word it

Financing a client's materials out of your own bank account is the default setting for a lot of contractors. It does not have to be, and it is not a question of leverage: it is a question of wording.

A deposit does not buy trust, it buys materials

That sentence changes everything. "I need 30% up front" sounds like suspicion. "30% at signature to order the panel and the charger" states a fact: materials are paid for before they are installed, and that is what the money is for.

Clients almost never argue with a deposit whose purpose they understand. They argue with a deposit that looks like a cash-flow loan.

What actually triggers the refusal: timing

It is not the amount that scares people off, it is learning about it after saying yes. A deposit stated in the quote, next to the total, goes through. The same deposit raised by phone three days later wakes up every doubt you thought was settled.

Put it in the document, with the balance in the same breath:

30% ($1,245.45) at signature to order the panel and the charger. Balance ($2,906.05) on completion, after electrical inspection. Payment by e-Transfer, cheque or card.

Three lines. They settle the amount, the timing and the method — the three questions the client would ask anyway, in that order.

How much to ask

There is no universal rule, but there is a logic: the deposit should cover what you front, not your profit.

• Material-heavy job — panel, charger, windows, flooring: the deposit tracks material cost, often 30 to 50%.
• Labour-heavy job — painting, finishing, repairs: a smaller deposit, or none at all on a small amount.
• Long job — a schedule beats a large deposit: 30 / 40 / 30 splits the risk on both sides.

A deposit well above material cost is hard to justify, and it is the one that makes people call a second contractor.

The trap that costs 15%

This is the most common mistake when splitting a contract by hand. You take the tax-included total, take 30% of it, then invoice that amount as a pre-tax figure — and add tax on top.

On a $20,000 contract, the invoices add up to roughly 15% more than the contract. The client notices on the final invoice, and they are right to be annoyed.

The rule: split the pre-tax amount, then calculate tax on each milestone. The invoices must add up to the contract, to the cent.

Collecting it while the pen is warm

A deposit agreed in principle and paid three weeks later has financed nothing. The moment a client is most willing to pay is the moment they just signed — not tomorrow, not after the long weekend.

In Devik the schedule sits on the quote, and the first milestone is invoiced at signature: the client signs and pays in one motion, by Interac e-Transfer or card. Paying stays optional — the signature is valid either way — but the path is there, at the right moment.