Interior design payment terms: how much advance, and when the rest lands

Most studios start with 50% advance and 50% on completion, because it is simple and because it is what the last person did. It is also the structure most likely to leave you paying for someone else's kitchen out of your own account in week six.

Why 50-50 squeezes you

Your spending on an interior job is not evenly spread — it is heavily front- and middle-loaded. Ply, laminate and hardware are bought early. Carpentry is paid weekly from the moment work starts. The counter goes in near the end. Meanwhile 50% of your money arrived on day one and the other 50% arrives after handover, which is also after the snag list, which is after the client has moved in and found three things.

On a ₹12 lakh kitchen that means roughly ₹6 lakh has to cover materials, labour and supervision for the entire middle of the project. The gap is funded by you, and it is the single most common reason a profitable studio has no cash.

What most Indian studios settle on

Four tranches, roughly:

• 30–40% on signing — before anything is ordered.
• 30% at a defined mid-point — commonly on delivery of materials to site.
• 20–30% near completion — installation done, before finishing.
• 10% at handover.

A design-only engagement usually runs 30% on signing, 30% at design approval, 40% on final drawings. The principle is the same: money should arrive slightly ahead of the spending it funds, not behind it.

The part that decides whether you get paid

Percentages are the easy half. The half that matters is what triggers each tranche — and this is where most schedules quietly fail.

“50% on 50% completion” is not a trigger. It is an opinion, and on the day you invoice it will be a different opinion from the client's. So will “on substantial completion” and “at the mid-point of works”.

Tie every tranche to something a person can stand in a room and observe:

• on delivery of carcass material to site
• on installation of base and wall units
• on fixing of countertop
• on handover of keys and snag sign-off

Nobody argues about whether the counter is fitted. Plenty of people argue about whether a job is half done.

The last tranche is the one that goes missing

Final payments get stuck on the snag list, and snag lists have no natural end — every visit produces one more item. Two things help.

First, make the snag list closed: one joint walkthrough on a stated date, everything written down then, and that list is the list. Items found later are a separate, chargeable job. This is not harsh; it is the only version that ever ends.

Second, keep the final tranche small — 10%, not 30%. A client holding ₹1.2 lakh over a chipped shutter is annoying. A client holding ₹3.6 lakh has all the leverage, and knows it.

Asking for an advance is not awkward

Advance payment is normal across every trade in India, and a client who refuses one entirely is telling you something useful about how the rest of the job will go. You are ordering material against their name before you have their money; that risk is theirs to fund, not yours.

It also lands better when the client can see where the number came from. Someone who has watched a kitchen or a wardrobe priced line by line argues about the advance far less than someone handed a single figure — it stops looking like a demand and starts looking like the material order it actually is.

The way to make it unremarkable is to put it in the quote, in the same typeface as everything else, before anyone has to ask. Terms raised at signing feel like a negotiation. Terms printed on the document they approved feel like the price.

One practical note on GST

GST is generally due when you invoice a milestone, not when the project ends. A schedule that collects money without raising invoices at each stage can leave you owing GST on cash you have already spent. Raise the invoice with the tranche — and ask your CA how this applies to your arrangement.

What to write in the quote

A schedule someone can act on has four columns and no adjectives: the stage, the trigger event, the percentage, and the amount. If any row needs a paragraph to explain when it becomes due, it is not a trigger yet.