A common conversation I have almost weekly with design and build digital agencies is about payment stages for design and build projects.

For projects over £15K total value, I would recommend the following which I feel works in both the customer and agency’s best interest. Actually, I would go so far as to say that 95% of agencies I know actually use a simpler version of these payment terms. However from experience these are the most effective:

1. Upon the client project sign off and prior to commencement of the project 33% of total design and build project price should be paid.

2. At an agreed midway stage that can be clearly defined e.g after planning, scoping, design, html etc. a second stage payment of 33% should then be paid. At this stage the client should sign they are satisfied with the work to completed to date and make the payment before the agency commences completion of the final project stage.

3. At the point of UAT (User Acceptance Testing) stage, this is where all the design and build work for the project has been completed, with the possible exception of client entering content and client testing of the project a payment of 28% should be paid prior to hand over of the site on a test location. A period of 10 days should be agreed at this stage for the client to provide any bugs/fixes that they have notices, as well as enter any content the website needs.

4. At the 10 day point the final invoice stage for 6% becomes due and should be paid in full before the website is set live. I would recommend that customers are then given a 30 day warranty period to fix any bugs/issues that inevitably arise with any website developments. I would advise against any website being set live without final payment being made. The client should sign to say they are satisfied with the project and that they understand they have 30 days to notify the agency of any issues that have arisen.

5. After the 30 day warranty period, I would advise all clients to be offered both a SLA (Service Level Agreement) to support any future technical issues that arise as well as a monthly retainer to ensure that all customers are able to add new features and developments to their websites.

For projects under £15K I would recommend the payment stages to be 45% on commencement, 45% on UAT, and 10% on go live.