Quotes, variations and getting paid: the paperwork that protects your margin

Section 15 of the Consumer Protection Act covers repair and maintenance services for consumers. In short, you may not charge for the work unless you gave an estimate and the customer authorised it, or the customer declined an estimate or pre-authorised a maximum amount in writing or another recorded form. The threshold is R1 excluding VAT, so in practice it applies to almost every repair job.

• You may not charge for preparing the estimate, including diagnosis or taking things apart, unless that charge was disclosed and approved first.
• You may not exceed the estimate without telling the customer and getting their authorisation.
• The estimate should break down the work and the total, and say how long it is valid.

The Act also gives consumers a six-month implied warranty on goods and a three-month warranty on new or reconditioned parts and labour in repair work. How these sections apply to building work on fixed property is a legal question; if it matters for your business, ask an attorney.

• Number first: the total, with VAT shown or a note that you are not a VAT vendor.
• Scope: what is included, written so the customer could check it on site.
• Exclusions: what is not included, especially the items customers assume are.
• Validity: how long the price holds, because material prices move.
• Payment terms: deposit, stage payments and when the final payment is due.
• Variations: a line saying any change in scope will be priced and agreed in writing first.

A variation is any change to the agreed scope, price or time. The customer asks for a different tile, a moved plug point, an extra cupboard. On site it feels easier to just do it. At invoice time it becomes an argument, because nothing was written down and the customer remembers it as included.

1. 01Write the change down on site, on a variation form or in a WhatsApp message.
2. 02Price it from cost, the same way you priced the job.
3. 03Get the customer's written approval of the price and any change to the completion date.
4. 04Only then do the work, and invoice it with the next stage payment.

On anything longer than a few days, tie payments to stages so cash comes in as the work goes out: a deposit for materials, payments at agreed milestones, and a final payment at completion.

On larger contracts the client often holds back a percentage of each payment, called retention, until the work is complete and defects are fixed. Retention of 5% to 10% is common in practice, with part released at practical completion and the rest at final completion, but the percentages and release points are whatever your contract says. Standard-form contracts such as the JBCC agreements set them in the contract data. Read that page before you sign and diary the release dates.

• Send a statement as soon as the invoice is overdue, then follow up in writing at set intervals.
• Keep everything in writing. A written or tacit acknowledgement of the debt by the customer interrupts prescription.
• Ordinary debts, including unpaid invoices, prescribe after three years from the date they are due, under the Prescription Act.
• Serving summons also interrupts prescription. Speak to an attorney well before the three years are up.