I am looking into the possibility of sending some work to an offshore consulting firm. They are requesting Terms of 50% deposit upon acceptance of SOW, 50% delivered upon delivery of programming. Is this standard practice for offshore consulting? I normally bill my customers as work is done / completed.
closed as off topic by ElYusubov, Oded♦, Walter, Robert Harvey, Jalayn Oct 10 '12 at 10:55
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Partial advance payment is common, and symptomatic of a fundamentally lower level of trust between companies that are more distant (geographically, culturally, and legally) than "onshore" consultants. However, a 50% advance is rather high and might be a reason for concern, or it might just be something they expect to negotiate on and end up with 25%.
In any case, offshoring development is prone to failure and requires continuous involvement on your side to improve the chances of success. I would only do it if you can bear the risk of having it fail completely. If it is successful, both you and the offshore firm have then more reason to trust each other: you might trust them with more important work, and they might not require advance payment.