Procurement & finance
Front-Loading
A payment schedule in which the money runs ahead of the work — a large mobilisation payment, a thin completion payment. It is a transfer of risk to the buyer, agreed at signature and noticed far too late.
Three months in, you may be seventy per cent paid and forty per cent delivered. If the relationship then goes wrong, the remaining thirty per cent of fee is not enough leverage to compel the remaining sixty per cent of work.
Some front-loading is legitimate — suppliers do incur real mobilisation cost. The discipline is to plot cumulative payment against cumulative deliverable weight at contract setup, while renegotiating is still possible rather than merely desirable.
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