Payment terms that win work: what to put in your quotes

Two builders quote £62,000 for the same extension. One asks for 40% up front. The other asks for nothing up front and attaches a five-stage payment schedule with a line explaining the money for each stage is locked in place before it starts. Same price, same start date. One of them gets the job. Payment terms are not the small print at the bottom of your quote; for a nervous homeowner comparing three similar numbers, they are often the deciding line.

Payment terms are a sales tool, not admin

Homeowners read your payment terms as a preview of how you run a job. A quote that says "50% deposit, balance on completion" tells them nothing about how the project will actually unfold and asks them to carry all the early risk. A quote with a clear stage schedule, each payment tied to defined completed work, reads like a plan: it says you know the sequence, you expect to be judged on delivery, and you have nothing to hide. Most clients get three quotes. The prices usually land within range of each other. Terms are where a quote differentiates itself without cutting a single pound off the price.

Why "40% deposit" loses jobs

Large deposit requests lose jobs because every consumer guide the homeowner reads tells them a big deposit is a warning sign, whatever your reasons for asking. Your reasons are usually legitimate: materials to order, lead times to hold, and scars from clients who disappeared at final invoice. The homeowner cannot see any of that. They can only see the same request they have read about going wrong, and they have read the same stories you have. Asking transfers your risk onto someone with no way to price it, so the cautious ones, who are usually the reliable payers, walk.

There is a second cost. If big deposits are how you fund jobs, you end up declining good work when a sensible client refuses to pay one, a trap we cover in turning down profitable work. The answer is not a braver deposit request. It is a structure where nobody has to fund the other side.

Escrow as a differentiator

Offering escrow in your quote turns payment security into a selling point instead of a negotiation. The pitch to the client is one sentence: "You do not pay me a penny up front; each stage's money is held securely before I start the stage, and it is released to me when the stage is signed off." Every fear behind their deposit resistance is answered in that sentence, and you have not discounted anything.

It reads well from your side of the table too. Before you order a skip, you can see the stage's money exists and is locked: no more starting a stage on the strength of a promise, and no more final invoices that age for months. Neither side can touch the funds until the work is approved, so neither of you is trusting the other with cash. Platforms like Renopay charge builders 1% + VAT of each milestone, taken from the payout. If a stage is disputed and you can't agree, either side can ask for an independent RICS-qualified surveyor, and each side secures half the surveyor's fee. Client funds are held by OPP, an FCA-authorised electronic money institution. On a £60,000 job, the fee is £600 + VAT (£720), which cuts your non-payment risk and strengthens your hand in the terms comparison at the same time.

Example payment terms wording

Here is wording you can adapt for the payment terms section of your quotes.

Milestone escrow version:

Payment is by stage, through a milestone escrow service. The full value of each stage is paid in and held securely before that stage of work begins, and is released to us when the stage is complete and signed off. No deposit is payable to us directly. The stage schedule for this project is set out below. Any variation to the agreed scope will be priced in writing and agreed by both parties as a separate funded stage before the additional work proceeds. The final stage covers snagging and completion, and is released on sign-off of the agreed snag list.

Staged invoicing version, if a client prefers a conventional route:

Payment is by stage, invoiced on completion of each stage as set out in the schedule below, with payment due within 7 days of invoice. Variations will be priced and agreed in writing before the additional work proceeds. Overdue amounts are subject to interest at [X]% per annum, and, for business customers, to statutory interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998.

Attach the stage schedule itself as a simple table: stage, description of the completed work that triggers payment, amount. Vague stages such as "second payment: mid-project" undo the whole effect; every stage should name something the client can stand in front of and see finished.

Terms that answer questions before they are asked

A good terms section quietly answers the three questions every homeowner is carrying: what happens if I pay and the work stops, what happens if the work is wrong, and what happens if we disagree. Funded stages answer the first, a defined snagging stage answers the second, and naming independent assessment as the tiebreaker answers the third. A quote that answers all three before the client asks does not need to be the cheapest of the three on the kitchen table.

You can see how funded milestones work for building firms at renopay.co.uk/builders. Ready to put the escrow line in your next quote? Join Renopay at renopay.co.uk.

Frequently asked questions

What payment terms should a builder put on a quote?

A stage-based schedule where each payment is triggered by defined, completed work, a written variations procedure, a defined snagging and completion stage, and an interest clause for late payment. State the terms in the quote itself, not just in the contract that follows.

How much deposit should a builder ask for?

The less the better, because large deposit requests are a quick way to lose a cautious client. If you need early money for materials, tie it to a specific first stage such as delivered materials, or use escrow so the client funds the stage without paying you in advance.

How do I ask a client to use escrow?

Put it in the quote as your standard terms and explain it in one sentence: the money for each stage is held securely before the stage starts and released when the work is signed off. Framed that way, it answers the client’s deposit fears and your payment fears in the same breath.