Your post is helpful as I have still had issues with the “last mile” payment (something I’ve gotten tougher on) and I feel adding that last bit of sternness will help; acknowledging the worth of my time is of course good for myself and for the customer who chooses to see that value and that can afford that time.

If I were to do a site on a clients servers I would defiantly enforce payment before go live.

Good for you for standing your ground… That could easily have been a VERY bad situation for you!

25% is due. This pays for the design creation up front. Doing design at this point means the design can follow the content, like form following function. Less design rework will be needed since everything will be accounted for (hopefully).

20% is due. This pays for coding up front. Sometimes the coding, especially for complicated sites, can seem like more than 20% of the cost, but remember, you have already been paid 75%, so you can slide some of the previously paid money here. It is good that you have a good amount paid up so as to be able to contract work out, if necessary.

5% is due when you have completed your work (not when they go live). (Thanks for the idea @Sam Adams.)

With this system you are paid up front before each stage, so that if the client walks, you are not out of any money. Also, be sure to charge an amount that pads the 5% amount above what you really need. This amount can be put towards any inconveniences and last-minute things the client asks of you and basically covers the countless phone calls and email chasing. If the client has been “good” and hasn’t caused any undue stress or time-wasting, you could even be generous and give a “freebie” back with this amount. So, they get some extra value and feel special.

Also things we are going to implement: Get the VP of Accounting to sign our agreement. This is the person who really dictates how payments are made, not the unfortunate person who has been put in charge of the project. This will reveal right away any payment issues that may arise. If the Accounting Dept. person balks at your T&Cs, you may want to reconsider them as a client.

Next, get the project responsibility team’s contact information and availability schedule, including holiday information. There is nothing worse than trying to chase down someone responsible for a sign-off only to find out that they went on holiday.

Another idea: use change request forms for every change/request and get more than one signature from the team. This is a lifesaver as it can eliminate ideas that have not been through a review process and approved by the entire team. Inform them that this will ultimately save them time and money, as you would have to charge extra for re-work.

I’ve compiled peoples comments into a form that you can copy and paste and decide in your own time… some nice points were made about the final contingency plans if that fateful day arrives for a non-payer.

Website payment ideas
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smaller payments: for points ; client prefer smaller invoices and are there fore more likely to pay-up without issue.
smaller payments: against points ; more time needed to manage payments and chasing up invoices plus update your own accounts. wood for the trees time….

Larger scale sites would require more milestones if you are an independent web developer/design/(add your own contemporary moniker)

25% down, 25% in two more increments at major milestones, 25% on work effort acceptance (before go-live)
or
50% deposit / 25% design approval / 20% html / 10% completion (prior or following launch…? who cares you’ve got 90%)
or
40% Deposit / 30% Design approval / 25% Coding / 5% On completion (before Launch)

payment on completion plan (prior to launch). but provide a 15 day “minor” changes period. (need to define minor changes and also limit time allowance for these to be completed within for them to count as minor.)

Any sites which are developed on third party servers will require 100% payment before files are transferred across.

If anyone has a problem with milestone payments walk away…

trusted/repeat clients 15 days credit to settle their account and we usually invoice a day or two after the launch.
If they don’t pay – we’ll chase them, add a late payment fee and/or interest ( add an hour of work time + 30%, )
and if there is still no payment, pass it to a debt collection agency including their cost on the invoice.

OK, i have added some of my own thoughts into the mix as well.

Cheers

Thanks for the prompt Sarah(?) and would it bepossible to see a copy of your current agreement contract via email?

Just my opinion on the milestone issue. We do 99% of our projects on a 50% deposit and 50% payment on completion plan (prior to launch, same as you).

Regarding the 5% or whatever payment to be withheld for final snags, I have toyed with the idea, and rather opted to keep the 50/50 payment structure, but provide a 15 day “minor” changes period. A guarantee of sorts. It only covers typos and minor changes and anything after that period is charged at hourly rates or quoted.

I’ve only had one situation where a client requested we change the 15 days to 30 days as his lawyer needed to run through his content and his turnaround required more time. I obliged as there would only be textual changes, and no skin off my back.

For us we have opted to present the agency/client with a development framework, which has staged payment points right up to the end ‘live stage’ – it’s weighted at the start of the project and then drops off so by the ‘live stage’ they only owe 10-15% of the total cost. This way you are never over exposed to a heavy loss. In our experience clients prefer to make smaller regular payments rather than be hit with a large final payment. That said there are always clients or agencies that will try it on…