Some large corporations and governmental organizations are making advance payments available. This is to allow these emerging contractors to stake their claim in the industry and guarantee the performance.
Advance payments are usually to ensure that the candidate has the funds on hand to get materials and pay their staff.
The problems that arise with an advance payment often occur through mismanagement of the funds. It takes discipline and good planning to ensure that you run the best practices for advance payments.
Why You Should Ask for An Advance Payment
A large project undertaken by smaller companies will need an advance payment, to ensure the completion of work in an efficient time frame. It is always a good practice to include that you need an advance payment onto your quotation. If the company who has issued the request for quotation is not willing to supply an advance payment, then they will not consider you to start with.
You need to have on hand a detailed listing of all the materials you need to complete the project. You will already have a pricing structure which you used to quote on the work. Now would be the best time to see if you can improve those prices from your suppliers since you have the order in hand.
The order is always an excellent bargaining chip.
Purchase all the materials before you begin the project. You have the money to do so. There is nothing worse than completing part of the job and then having a shortage of material. Remember they won’t pay you until completion, so the quicker and more efficiently you get that done, the better.
The workforce you put in place for the project is vital to the success of the project. You have provided a quotation based on the staff members you will need to complete the work and at a rate that is reasonable.
Don’t cut down on staff to save money. In the long run, it could end up costing you the success of the project and the prospects of any future projects.