Your supplier wants a bigger deposit.

The supplier wants more money upfront

A joinery supplier asks a contractor for a much larger deposit on the next materials order. The contractor has already agreed a smaller deposit with its own customer. Paying the supplier would use cash reserved for wages, but refusing could delay the job. Before transferring funds, the owner needs to understand the changed terms, delivery certainty and the gap between the two payment schedules.

Confirm the request and the reason

Obtain the revised quotation and payment conditions in writing. Ask whether the change applies to a new order or one already accepted. Check the supplier’s identity and verify payment details through a trusted channel.

Ask what the deposit funds: custom production, imported stock or a change in credit policy. A larger request is not proof of financial trouble, but it should prompt a practical review of the supplier’s capacity and the consequences if delivery fails.

Read what the deposit actually secures

Check the goods, quantities, delivery dates, cancellation terms and treatment of the payment if the order cannot be fulfilled. Identify whether ownership, insurance or security arrangements need professional advice.

Do not assume a deposit guarantees stock will be available or that goods are automatically yours. Ask for evidence appropriate to the order, such as production milestones or allocation confirmation. Keep the response with the purchase documents rather than relying on a salesperson’s assurance.

Compare the cash schedules on both sides

Place the supplier payment beside the customer deposit and next expected receipt. Add the job’s labour and other costs. Calculate the extra working capital required before the next billing point.

Discuss lawful alternatives such as staged supplier payments or smaller deliveries where feasible. Do not impose a higher customer deposit under an existing agreement without checking the contract and applicable rules. Solving the supplier gap should not create an unapproved customer demand.

Make a deliberate order decision

Compare the total cost, reliability and terms of alternative compliant suppliers. Include delay and transport consequences, not just the deposit size. If the chosen arrangement remains affordable, document the approvals before paying.

If it cannot be funded, reassess the job timetable and obtain advice before breaching commitments. Business.gov.au recommends clear supplier agreements covering payment, delivery and quality. Those details are especially important when more of the risk moves to payment before delivery.

Source: business.gov.au — Suppliers

Test the deposit and delivery exposure

Get the revised terms and verify payment details independently.

Check delivery commitments, cancellation treatment and any ownership or security questions.

Calculate the funding gap and compare staged payments or alternative supply before transferring the larger deposit.

Call CRP today about supplier payment pressure and commercial disputes.