What payment terms should I use for customer jobs?

Think about when your cash leaves the business

If you must buy materials, reserve equipment or commit subcontractors before work starts, waiting until the very end for all payment can put unnecessary pressure on cash flow.

Common structures

• Deposit + final payment: simple for shorter projects with meaningful upfront costs.
• Deposit + progress payments + final: useful when work spans milestones or several weeks.
• Due on completion: may fit short, low-cost service calls where little cash is committed upfront.
• Net terms: sometimes expected in commercial work, but they increase the time your business waits for cash.

Make milestones objective

For progress billing, connect payments to understandable events—such as ordering materials, completion of a defined phase or substantial completion—rather than vague timing.

Put the terms in writing before work begins

State deposit amount, progress payments, final balance, due dates, accepted payment methods and what happens when approved scope changes. Requirements for deposits, late fees and contract language vary by state and industry, so follow applicable rules.

Track receivables separately from profit

A profitable job can still create a cash problem if payment arrives long after the business paid its costs. Review both job profitability and how quickly invoices turn into cash.