How to Cover Materials and Crew Pay Before the First Payment Comes In

How much should I ask for as a deposit on a job?

Ask for enough to cover your materials and your first week or two of crew pay, which is not always the same as a flat percentage.

Start from your costs, not a habit. Add up what you have to spend before the first progress payment arrives: materials you buy up front, crew pay until the first milestone, and any permit or dumpster fees. Divide that by the job price and you have your minimum deposit.

Say a $12,000 bathroom remodel has $4,800 in materials and $4,200 in crew pay. If the first $2,400 of materials has to be bought before demo, a deposit of 20% ($2,400) covers it and you never touch your own account.

On small jobs of a day or two, ask for the materials cost up front and bill labor at the end. Deposit limits and contract wording vary by state, so check with your state's contractor registration office before you set a number. Quoting tools such as Jobber let you put a deposit on a quote as a percentage or a fixed amount, which locks in the work and reduces payment risk before the job starts (Jobber Help Center).

How do I get paid for materials before I buy them?

Break materials out as their own payment, due before you order, and do not place the order until it clears.

Here is the order I would follow:

• Get a written quote from your supplier and note how long the price is good for.
• List materials as their own line on the estimate, separate from labor.
• Make the material payment due 3 to 5 days before you need to order or pick up.
• For big items like windows or cabinets, have the customer pay the supplier directly by card at order time, so the money never runs through you.

Can you charge for special-order materials separately? Yes, and you should. Name each special-order item on the estimate with its price and lead time, and write that it is non-refundable once ordered. Ask the supplier about return policy and restocking fees before you order, not after.

How do I ask for money upfront without scaring the customer off?

Present the payment schedule as a normal part of the estimate, tie each payment to a stage of work, and tell the customer exactly what each one buys.

Say it plainly: 'The first payment orders your materials, which locks your price and holds your start date.' Customers push back on one big lump sum, but they rarely push back on payments that match progress they can see.

People worry you will take the money and disappear, so give them reasons to trust you:

• Photos of past jobs and a local address or phone number they can verify.
• Proof of insurance, if you carry it.
• A signed written estimate that lists every payment and what it covers.
• Receipts for materials once you buy them.
• Payment by card or bank, so there is a clear paper trail on both sides.

In MagicBuild, Magic can build the estimate from a photo and a description at your own prices. The client gets it by email, signs on their phone and can pay the deposit by card or bank, and the signed estimate becomes a project automatically. You can see what MagicBuild does for the full picture.

How does progress billing work on a small job?

Split the price into payments tied to finished work and bill each one on its own invoice, so you are never more than one stage ahead of the customer's money.

For example, here is how the $12,000 bathroom could be split:

The rules that make this work:

• Tie every milestone to something the customer can see, like drywall hung or tile set.
• Send the invoice the same day you hit the milestone.
• Make it due on receipt or within a few days, not 30.

Housecall Pro calls this progress invoicing: separate invoices for a percentage or fixed amount, with due terms you can customize (Housecall Pro Help Center). Short terms matter, because if you wait on customers you are in the majority: in a TSheets and zlien survey, 92% of respondents said customers do not always pay them on time, and only 8% always get paid on time (TSheets).

What do I do if the customer changes their mind after I've bought materials?

Protect yourself before it happens: put a non-refundable clause on special-order items in the signed estimate and do not order until the material payment clears.

If it happens anyway, work through it in this order:

• Pull your receipts and the supplier's return terms.
• Ask the supplier whether they will take the item back and what the restocking fee is.
• Apply the customer's payments to your documented costs first.
• Send an itemized statement showing what you spent, what you returned and what is left.

Say a customer cancels after you ordered a $1,500 vanity. If your signed estimate says special orders are non-refundable, the material payment goes toward that vanity, and if the supplier takes it back you credit the customer the amount minus the restocking fee. What you can keep depends on your contract and your state's rules, so ask your state's contractor registration office if you are unsure.

If the material fits another job, use it there and credit the first customer. That usually ends the argument faster than a fight over a few hundred dollars.

How do I make payroll when the customer hasn't paid me yet?

Time a payment to land before each payday and make the deposit big enough to carry the crew to the first milestone.

If you have ever turned down work because you could not carry it, you are not alone: 90% of commercial construction leaders in one survey said cash flow timing has made them pass on a profitable project (Business Wire).

Try this on every job before you say yes:

• Write down what you pay the crew each Friday for the first month.
• Mark which payment on your schedule covers each Friday.
• If any Friday has no payment behind it, move a milestone earlier, add a weekly draw or make the deposit bigger.

Say two helpers cost you $1,400 a week. If the rough-in draw is due the Thursday before payday, the crew is paid from the customer's money and not yours. On longer jobs, bill weekly or every two weeks for work done so far.

The free job cost calculator helps you check labor hours against the price before you commit. Once the job runs, MagicBuild's crew app has check-in and check-out so you see hours as they happen, receipts are filed to the job, and you can see job profit as you go.

What should I put in my contract and invoice so I get paid on time?

Write the payment schedule, due dates, accepted payment methods, late-payment terms and special-order terms on the estimate both of you sign, then repeat them on every invoice.

A short checklist:

• Every payment, its amount and the milestone that triggers it.
• The due date for each invoice, such as due on receipt or within a few days.
• Accepted payment methods, like card, bank transfer or check.
• What happens if a payment is late, such as work pausing until it is paid.
• Special-order items listed by name as non-refundable once ordered.
• A line saying change requests are priced and approved in writing before work.

Jobber's guidance on invoice payment terms covers the same ground: due dates, accepted payment methods and consequences for late payment, so you can enforce when and how you get paid (Jobber Academy). Late fees and required contract language vary by state, so confirm with your state's contractor registration office. If you do not have an invoice layout yet, the free invoice template is a start.

To set all of this up before your next job, start a free trial of MagicBuild and try it free for 14 days. If you keep it, it is $69 a month, and your crew and clients do not cost a seat. You can also use the free job cost calculator and invoice template on their own, no signup needed.