Catering deposits: how much to take and when
- Author
- Masoud Shoja
- Published
- Read time
- 2 mins
A catering order is a promise in both directions. You promise the food and the date. The customer promises to pay. A deposit is what makes the customer’s promise real before you start spending money.
What the deposit is for
Two things. It covers what you buy and prepare ahead of the event, and it pays for the date. Once you accept a large order for Saturday, you may have to turn the next one away.
How to size it
There is no single correct percentage. Work it out from your own exposure: add up the ingredients and packaging you will have bought by the time a customer could still cancel, and set the deposit at or above that amount.
- A percentage of the order is simple to explain and grows with the order
- A flat amount works when most of your orders are a similar size
- Full payment up front is reasonable for small orders and short notice
When to collect it
Take the deposit when the customer accepts the quote. Until then the date is not held. Say so in the quote, so nobody is surprised when another customer books the slot first.
Set a date for the balance as well. Collecting it before the event, not at the door, means your driver is not chasing a payment while the food gets cold.
Put the cancellation terms in writing
State what happens to the deposit if the customer cancels, and tie it to dates. A common structure is a full refund up to a cutoff, a partial refund after it, and none once you have bought the food. Choose cutoffs that match when you actually place your orders with suppliers.
Also state what happens if the headcount changes, and the last day the customer can change it.
When an invoice is better
An office that orders from you every month should not have to pay a deposit each time. For regular business customers, billing on invoice with agreed payment terms is easier for them and keeps the orders coming. Keep deposits for new customers and one-off events.
CaterCart supports both. Every plan sends quotes and collects the deposit online. CaterCart Max adds invoice and Net-terms billing with house accounts for repeat clients.
