Payment schedules for small contracts

[mystomachehurts]

This should probably be in the business forum but I just wanted a few of you contractors to take a quick look.

I've got a small support contract opportunity circa £5K but spread over 12 months.

What kind of payment schedule should I run for it?

Normally I'd do
40% at kick-off
50% at 6 months
10% at completion

But the amounts for the 10% are silly and with the Customer being a large Company, their accounts and payroll don't like dicking about with small invoices.

Having condsidered this, I'm really only left with 40% kick-off & 60% at completion, but getting a few extra £K part way through the contract is always a nice security.

Any thoughts?

[sgrimshaw]

You say it's a support type of contract.

If so, it would be normal to expect to pay for support contracts in advance.

I'd look at something like :

6 monthly in advance E.g. 50% on 1st March, 50% on 1st September.

or

Quarterly in advance E.g 25% on 1st March, 1st June, 1st September, 1st December

Simon

[miles_stylus]

I would tend to agree with Simon - after all the reason you'd "bother" in the last payement period (assumeing someone is looking at the risk or paying in advance) is that you'd want the support contract for the following year!

Miles