Asking for an advance: do it or not?

When you land a large order for a new customer, you naturally want to make sure that payment is made correctly. Under the guise “trust is good, but control is better”, it's best to ask for an advance just to be on the safe side. But is that possible just like that? Are there certain limits that you should respect? And why is it important to explicitly include such an advance in your contracts?

Work with an advance invoice

Do you enter your advances on your invoices? Smart choice. It's so easy to avoid having your customers thank themselves afterwards and are already sure that they pay at least that part of the invoice (in advance). However, if you do not comply with the agreement as agreed, you are obliged to drop the advance.

What does the law say?

General

In most sectors, it is legal to ask for an advance without specific restrictions. This applies regardless of the nature of your business or the services you provide.

Include in your contract

If you want to ask for an advance, you are obliged to agree with the customer when concluding the contract. If the contract has already been concluded, you can actually no longer ask for an advance. Isn't that what you're doing? Then the customer has the right to refuse payment.

How much and when

There are no general legal restrictions in terms of amount, except in specific cases such as the Breyne Act, which applies to plan sales or turnkey homes. However, it is advisable to clearly state the amount of the advance in your contract or terms and conditions. It is also best to decide when you want to receive payment at the latest and that, in case of late payment, you have the right to wait to execute the contract.

And beyond?

In addition, you can also decide exactly how the advance will be charged (for example, on the last invoice, if you are going to send multiple invoices). In addition, it is possible — provided that the deposit is not excessive — to agree to keep the amount as compensation in case the customer cancels or cancels the agreement. When doing business with consumers, you must provide equivalent compensation in case you fail to comply with the agreement yourself.

Conclusion

Requesting an advance offers financial security and builds trust with new customers. It's important to clearly state the terms of the advance in your contracts. Although the legislation is flexible, specific rules must be taken into account. A balanced approach is crucial when doing business with consumers, while not losing sight of your own responsibilities. Using advances wisely is essential for financial stability and reliability in business relationships.

Would you like to receive more information about this issue or do you have any questions? Feel free to take contact contact us, we are happy to help you out.

Thanks to Jan Roodhooft, Attorney, for his insights into this article.

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