Quick answer: Collect the deposit at the moment the customer signs — in the same sitting, as part of the same step — not as a separate "before we start" conversation days later. Typical home-improvement deposits run 10–33% of the job, though several states cap the percentage, so check your local rule. The exact amount matters far less than the timing: a signature without a payment is a promise, and promises are what you end up chasing.
Most contractors think of the deposit as a logistics step: get the contract signed, then a few days before the crew shows up, ask for money. That gap — between "yes, let's do it" and the deposit actually landing — is where a surprising amount of revenue quietly leaks out.
Why "before we start" is too late
The day a customer commits is the day they're most sure. From there, certainty only erodes: a spouse raises a concern, a surprise bill lands, another contractor calls back, or the project just stops feeling urgent. If your deposit request arrives three days later as its own ask, you're re-selling a decision the customer already made — and giving second thoughts room to grow.
There's a cash-flow cost too. Construction already has the worst payment timeline of any major industry — average days-sales-outstanding runs about 83 days versus roughly 60 across all industries (K38 Consulting). Every day between commitment and first dollar widens that gap. Collecting at signature collapses your first payment window from weeks to minutes.
How much should you collect?
There's no universal number, but common practice clusters here:
- Small jobs (under ~$10k): 25–50%, sometimes the full materials cost.
- Mid-size remodels: 10–33%, with the balance drawn against milestones.
- Large projects: a smaller deposit (10–20%) plus a clear milestone schedule does more work than one big number.
Check your state. Several states cap home-improvement deposits by statute or percentage (for example, some limit residential deposits to a set fraction of the contract). Consult a legal professional for the rule where you work, and put that number in your contract.
The deposit's real job isn't to fund the job — it's to confirm commitment. A customer who balks at any reasonable deposit is showing you risk you'd rather find now than on demo day.
The highest-leverage change: sign and pay in one step
Here's the move that separates shops that chase from shops that get paid: make signing and paying the deposit a single action. E-signature alone cuts time-to-signed-contract by 41% (DocuSign), and 70% of e-signed contracts are now signed on a phone (eSignGlobal). When the customer can review the proposal, e-sign, and pay the deposit by card or bank transfer in one mobile flow — at the kitchen table, while they're still excited — there's no second ask, no gap, no chase.
Compare that to the common path: email a PDF, wait for a signed scan, then later send a separate deposit request and wait again. Each handoff is a place the deal can cool.
Make the terms unmissable
A deposit works best when it was never a surprise. Put the full payment schedule — deposit, milestone draws, final payment — in the proposal as numbered terms the customer reviews and signs, not as fine print at the bottom of an estimate. More than 1 in 3 contractors say payments get delayed by disputes over the work (Levelset), and most of those start with terms that were assumed rather than agreed. Thirty seconds walking through a clear schedule at presentation prevents weeks of back-and-forth later.
This is exactly the flow Sharp & Hired was built around: the payment schedule rides inside the proposal, and the customer signs and pays the deposit in the same mobile step — so the gap between "yes" and signed-and-paid is minutes. But the principle stands no matter what tools you use: collect at the moment of commitment, on terms both sides already agreed to.
FAQ
Is it normal for a contractor to ask for a deposit upfront? Yes — it's standard for established shops. The deposit confirms commitment and funds initial materials. Customers who refuse any reasonable deposit are a risk signal.
How much deposit is too much? Beyond a third of the job for ordinary remodeling work tends to make customers uneasy, and some states cap it outright. Big number isn't the goal — collecting a fair amount at the right moment is.
Should I collect the deposit before or after signing? At signing, in the same step. Splitting them into two separate asks, days apart, is where deals cool and deposits get delayed.
What if the job is paid by insurance or a lender? Follow the carrier's or lender's disbursement schedule, but still document the payment source and schedule in the signed contract so everyone knows where the money comes from and when.
Sources: K38 Consulting — How to Improve DSO in Construction, eSignGlobal, DocuSign, Levelset. Deposit caps vary by state — confirm your local rule; this is not legal advice.