Deposits and payment schedules for kitchen jobs: what showrooms ask for, and why

The client signs on Friday. On Monday you place a $13,200 cabinet order and the factory wants half of it, $6,600, before it schedules production. If you took a 10% deposit on a $39,000 job, you're holding $3,900 against that $6,600. You're now the client's bank, and the cabinets are custom, so they can't go back.

Payment schedules exist to keep that gap closed. The percentages are just how you do it.

How much deposit do kitchen showrooms ask for on cabinets?

The most common number is 50% at signing. Cabinet shops on the WOODWEB forums call it close to standard for custom work. Some take 30% to 40% and make it up later. A large retailer like Wren Kitchens takes 10%, but collects the full balance well before delivery.

Here's what shows up in public:

• 50% down, balance at or before delivery. The default for a lot of independent shops, especially on jobs without install.
• 50/40/10. Half at signing, 40% before the cabinets come off the truck, 10% when install is complete. A common split on installed jobs.
• Thirds. One third down, one third when the cabinets are ready to deliver, one third near the end of install.
• At least 30% down. One forum contributor's floor, with the rest split across delivery and completion.
• 10% down, balance before delivery. Wren Kitchens' US FAQ lists a 10% deposit at order and the remaining balance 28 days before delivery.

Notice what the low-deposit model depends on. Wren is paid in full four weeks before the kitchen ships. A small showroom that takes 10% and then waits for "balance on delivery" has the worst of both.

Why does the deposit have to cover the supplier deposit?

Because you pay the factory before the client pays you. Cabinet suppliers usually want money at order and the rest before they ship. If your deposit is smaller than what you send the supplier, you're financing the job from your own account until delivery, and you carry the loss if the client walks.

Here's a worked example. The numbers are made up, but they add up.

Say the job sells for $39,000: cabinets $24,000, counters $9,000, install $6,000. Your costs are $13,200 to the cabinet supplier (50% at order, 50% before it ships), $5,400 to the countertop fabricator (50% at template, 50% at install) and $3,600 to your installer when the boxes are in. Total cost $22,200, gross profit $16,800, about 43%.

Schedule A: 50/40/10

The job never goes negative. Even at week 7, the lowest point, you're $6,300 ahead.

Schedule B: 10% down, balance before delivery

From week 1 to week 8 you're out of pocket. If the client cancels in week 4, you've collected $3,900 and owe the factory for custom boxes nobody else can use. If the balance arrives a week late, you've fronted $9,300 for a week. Same job, same $16,800 profit at the end. Very different seven weeks.

One rule falls out of this: the deposit should at least equal the supplier deposit on everything you order at signing. At 50%, this job's deposit covers the entire cabinet cost, not just half of it.

Which payment schedule should a showroom use?

For installed jobs, a three-step schedule like 50/40/10 is the safest common choice. It covers supplier costs from day one, gets most of the money in before the truck arrives, and keeps a small amount back so the client has a reason to sign off the punch list.

Tie each payment to something that happens, not a date. "40% due when the supplier confirms a ship date" holds up better than "40% due March 1", because ship dates move.

And be consistent. Several WOODWEB contributors make the same point: once you take a smaller deposit for one client, the next one hears about it.

Should you ever place the cabinet order before the deposit clears?

No. Not when the check is "in the mail", not when the client is a friend, not when the factory has a cutoff on Thursday. A signed contract is not money. Wait until the payment has cleared your account, then place the order and file the ack.

Cards and bank transfers usually clear fast. Personal checks can take several business days, and a check can still bounce after the funds show. If timing is tight, ask for a transfer.

The same goes for the second payment. If your schedule says 40% before delivery, the supplier balance and the delivery date both wait on it. Which is why it helps to see, per order, what the client has paid and what you still owe the supplier. More on that in tracking cabinet orders from contract to install.

What should the contract say about changes after the order is placed?

It should say that once the order is placed, any change is a paid change order, and the client pays for anything already made that can't be used. Custom and semi-custom boxes are built to your order. A door style swap in week 3 can mean paying for two sets of doors.

Things worth writing down, in plain language:

• The date the order goes to the supplier, and that changes after that date are change orders.
• Change orders are priced before the work is done and paid on the same schedule as the original job (or in full up front, if they're small).
• Restocking or cancellation charges from the supplier pass through to the client.
• A change can move the delivery and install dates, and the client accepts the new dates.
• Cancellation after ordering: the deposit covers costs already committed, and anything beyond the deposit is still owed.

Read your supplier's cancellation terms before you write yours. You can't promise the client a refund the factory won't give you.

What happens to the schedule when the client delays the job?

Write it so the payment follows the cabinets being ready, not the client being ready. If the factory ships on time and the client's plumber isn't done, the before-delivery payment is still due when the order is ready to ship. If you have to store the cabinets, say who pays for storage and for how long.

Shops on WOODWEB describe a few ways to handle it:

• The balance is due when the job is finished and ready to deliver, even if the client asks you to hold it.
• A storage clause with a location and a monthly charge, sometimes collected in advance and refunded if unused.
• A grace period, after which the cabinets go to a storage location named in the contract and the balance is due in full.
• A monthly late fee on unpaid balances.

Builder jobs need their own terms. A contractor who pays on the 10th of the month can leave you waiting most of a month after delivery, so either price that in or bill earlier. Damaged pieces at delivery are a separate issue. A scratched door shouldn't hold up 40% of the job, and the delivery inspection checklist covers how to handle it so it doesn't.

Do deposit rules differ by state?

Yes, and in some states it changes the whole schedule. California is the clearest case: on a home improvement contract, the state's licensing board says the down payment can't be more than $1,000 or 10% of the contract price, whichever is less, and the contract has to say so in bold type (CSLB). A 50% deposit on an installed kitchen would break that rule. Other states have their own limits and required wording. Whether your showroom counts as a contractor depends on what you sell and whether you install. This page isn't legal advice. Have a local attorney read your contract template once, and check with your state's contractor licensing board.

Keeping track of who owes what

Most showrooms track all this on a spreadsheet with one row per job, and it works until three jobs are mid-schedule and the factory emails about a balance you thought you'd paid. (That failure is covered in running cabinet orders on a spreadsheet.)

Salone keeps supplier rows on each order: who you ordered from, the cost, what you've paid them and what's still owed. The owner's finance view adds up income, costs, margin, cash paid out to suppliers and what you owe right now across every job. It doesn't take card payments or send deposit invoices. You keep doing that the way you do now. It just makes the gap from the worked example above visible before it bites.