How to take deposits and stage payments

Step 1 — take a deposit on larger work

For any sizeable job, ask for a deposit before you start — a percentage that covers your initial outlay on materials and mobilisation. This does two things: it funds the early spend that would otherwise come from your own cash, and it signals a serious, committed customer. A deposit converts the riskiest, most cash-hungry phase of a job from your problem into a shared one. It directly shrinks the cash flow gap.

Step 2 — structure staged payments

On longer projects, break payment into stages tied to clear milestones — design signed off, materials delivered, phase one complete. Each stage releases cash as you incur the costs, rather than waiting for one big payment at the end. This keeps cash flowing through the project and dramatically reduces how much you must finance yourself at any point. See how to fund a large new order.

Step 3 — make the terms clear and agreed

Set out the deposit and stage schedule in writing before work begins, with each payment tied to a defined, verifiable milestone and a due date. Ambiguity here causes disputes and delays. A clear schedule the customer has agreed to is far easier to enforce and gives both sides certainty. See how to set clear payment terms.

Step 4 — invoice each stage promptly

Raise the invoice the moment each milestone is hit, not at the next month-end. The whole benefit of staged payments is speed of cash, and a delayed invoice throws it away. Keep the customer informed as milestones approach so the payment is expected. Prompt milestone invoicing keeps the project self-funding as intended.

Step 5 — finance only the residual gap

With deposits and stage payments in place, any remaining gap is far smaller and cheaper to fund. Where a residual gap remains, a short facility covers it comfortably.

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.