How to set up stage payments for building work

A timber frame under construction — Tie each payment to a stage you can point to.

Tie each stage to something the client can see

A stage should end with something the client can check without taking your word for it. "Week two" invites a debate about how much got done. "Walls plastered and dry" does not.

Weak stage	Clear stage
50% done	Roof watertight, felt and battens on
First half of the work	First fix electrics and plumbing passed
Most of the way	Kitchen units fitted, worktops templated
End	Finished, snagging list agreed

Size the stages to what you spend

The heavier your spend on materials early on, the bigger the early stages should be. Try not to let any stage leave you more than a week or two of labour and materials out of pocket.

Invoice the day the stage is done

Send the invoice while the client is looking at the finished stage. Give a short payment term - three to seven days is normal for stage payments - and say on the quote what happens if a stage is not paid.

Put a line in your terms such as: "Work continues to the next stage once the previous stage invoice is paid." Agreed at the start, it is a process. Raised for the first time mid-job, it sounds like a threat.

Set the stages on the quote, then invoice each one from the job as it is done.

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When a stage is not paid

Ask the same day the payment is late - politely, with the invoice attached.
If your terms allow it, give written notice that work will pause until payment, and the date.
Do not start the next stage on a promise. That is how one missed payment becomes two.
Keep your record of the work done and the messages: see what to do when a client will not pay.

For commercial work the Construction Act gives you rights to interim payments and to suspend work for non-payment. It does not cover work for homeowners in their own home, which is why your written terms matter more there.

The final payment and snagging

Agree how snagging works before you start. A small list should not hold back the whole final payment: agree that the client can hold back a small sum until the snags are done and pays the rest on completion.

A stage invoice in JobGuard — Each stage invoiced from the job in a minute.

General information for England and Wales, not legal or tax advice. For your own situation, speak to a solicitor, accountant or Citizens Advice.

Questions

How many stages should a job have?

One per week or two of work is a good guide. A small job may need only a deposit and a final payment; an extension may need six or more.

Should extra work go into a stage payment?

Keep it separate. Invoice extra work on its own once it is done and agreed, so it never holds up a stage payment.

How do I ask a customer for stage payments?

Put the stages on the quote before the job starts, each tied to something they can see, such as "first fix passed" or "plastered and dry", and say work continues once the previous stage is paid. Agreed at the start, it is just the process.

How much deposit should I take on a big job?

Around 10 to 25%, sized to what you must buy before you start. Then split the rest into stages so you are never more than a week or two of labour and materials out of pocket.

Can I stop work if a stage payment is late?

Only if your terms say so. For commercial work the Construction Act gives you the right to suspend after notice; for a homeowner you need it in your written terms, so put it in the quote.

Stage payments: get paid as the job goes, not at the end