Paying in Stages

What stages are for

They solve a genuine problem on both sides.

A supplier taking on weeks of work needs some commitment before starting, since the alternative is carrying the cost of a project a client may abandon.

A client handing over a substantial sum needs to keep some leverage until the work is finished, since the alternative is paying in full for something not yet delivered.

Staged payments split the risk between the two, and they do that well when the stages are tied to something visible and badly when they are not.

The usual shape

Three or four payments is normal for a small project.

• A deposit to begin, commonly a quarter to a third.
• A payment at design approval, once the look is agreed.
• A payment at build completion, before launch.
• A final payment after launch and after checks.

The proportions matter less than what triggers each one. A schedule of four equal payments tied to deliverables is fine; the same amounts tied to weeks one, three, five, and seven is not.

Tie them to deliverables, not dates

The single rule that makes the rest work.

A payment due on a date arrives whether or not anything happened, which removes the protection the schedule was supposed to provide.

A payment due on approval of the design, or on completion of the build, is only earned when something exists that you can look at.

It also gives both sides a shared definition of progress, which is what most stalled projects are missing.

Where a supplier prefers date-based payments because a client is slow to approve things, that is a real concern and it is handled by a clause about client delay rather than by disconnecting payment from delivery.

The deposit

Reasonable, expected, and worth thinking about proportionately.

A quarter to a third is normal for a small project and covers the supplier's early work: discovery, planning, and the first design effort.

A demand for fifty percent or more before anything is produced is worth questioning, particularly from a supplier you have not worked with.

A demand for the full amount up front is not a payment schedule and should be treated as a warning rather than a negotiating position.

For a very small job, a single payment on completion is often simpler for both sides and avoids the administration entirely.

The final payment is the leverage

The stage that decides how the end of the project goes.

If nothing meaningful remains outstanding at launch, the supplier's incentive to complete the last ten percent depends entirely on goodwill.

That last ten percent is where the fiddly items live: the form that needs testing, the page nobody has proofread, the training session, the handover of credentials.

Keeping something back, commonly ten to twenty percent, until after launch and after an agreed check period is normal practice and is not adversarial.

Say what the check period is and what it covers, so it does not become an open-ended reason to withhold payment, which is the failure in the other direction.

Define what complete means

The clause that prevents most disputes at the final stage.

Write down what has to be true for the project to be finished: the pages live, the forms tested and delivering, the redirects in place and checked, credentials handed over, training delivered.

Without that, complete becomes a matter of opinion at exactly the moment both parties are tired and money is outstanding.

A short list agreed at the start is worth more than any amount of goodwill at the end, and it protects a supplier from a client who keeps finding one more thing.

A worked example

A firm agreed a four-stage schedule tied to dates: twenty-five percent on each of four fortnightly points.

By the third payment they had approved a design and seen nothing else, and by the fourth they had paid in full for a site that was not live.

Launch slipped eleven weeks. With nothing outstanding, chasing was a matter of persistence rather than of terms.

The site eventually launched with two forms that did not deliver, discovered a fortnight later.

Their next project used the same total and different triggers: deposit, design approval, build complete, and twenty percent thirty days after launch subject to a written completion list.

That project finished on time, and the supplier said afterwards that the completion list had been useful to them as well, because it ended the drip of small requests.

Delay caused by the client

The other half, and a fair schedule addresses it.

Most projects that stall do so waiting for content, feedback, or a decision from the client, and a supplier who has reserved capacity is carrying a real cost.

A reasonable arrangement says what happens: after a stated period of inactivity, the current stage becomes payable, and the project rejoins the schedule when the client is ready rather than resuming immediately.

That is fair to both and it removes the incentive for a supplier to pad estimates against the risk of a client disappearing.

Agreeing it at the start also prompts the conversation about who is producing the content, which is where the delay usually originates.

What to avoid

Three patterns worth declining.

Payment in full before work begins, for anything beyond a very small job.

Stages with no defined trigger, described as on commencement, mid-project, and on completion without saying what those mean.

And a final payment due on launch rather than after it, which removes the only leverage that covers the period when problems actually surface.

Where a supplier will not move on any of these, that is information about how the project will run.

The counter-case

Staged payments are not always proportionate.

For a small job, the administration of four invoices, four approvals, and a completion list costs more attention than the risk it manages, and a single payment on delivery is simpler for both parties.

There are also suppliers, particularly individuals, for whom a large deposit is a genuine cash flow necessity rather than an attempt to shift risk, and refusing on principle may cost you somebody good.

The judgement is the size of the project against the cost of it going wrong. Below a few thousand, keep it simple. Above that, stage it and define completion.

The structure

1. Tie every payment to something you can inspect.
2. Keep the deposit to a quarter or a third.
3. Hold ten to twenty percent until after launch.
4. Set a check period and say what it covers.
5. Write a completion list at the start.
6. Agree what happens if you cause the delay.
7. Decline date-only triggers.

Step five is the one that prevents the argument, and it is a ten-line document written before anybody has fallen out.

Comparing what quotes actually cover is in being quoted three very different prices.

Frequently asked questions

West Coast Media Solutions Inc. provides web design, web development, hosting, digital marketing, and business consulting to organisations across Canada, drawing on more than twenty-five years in the field.