Most caterers need deposits of 50-70% to cover their purchasing risk, but the exact amount depends on your specific costs. Without proper deposits, you're gambling with money you can't afford to lose. Calculate your exact risk to protect your cash flow.
What is purchasing risk in catering?
Catering means buying ingredients for a specific headcount on a specific date. Unlike restaurant service, you can't sell leftover salmon or specialty items the next day. Your purchasing risk includes every dollar you spend before the event happens.
💡 Example:
Corporate lunch for 50 people, menu €35 per person:
- Ingredients: €875 (50 × €17.50 food cost)
- Extra staff: €400
- Packaging/materials: €150
- Transport: €75
Total purchasing risk: €1,500
Calculate your total purchasing risk
Your purchasing risk covers all non-reversible costs you'll incur before serving. This goes beyond ingredients—include staff commitments, materials, and transport you can't undo.
Purchasing risk formula:
Ingredients + Extra staff + Materials + Transport = Total risk
- Ingredients: Guest count × food cost per person
- Extra staff: Additional hours × hourly rate for event-specific workers
- Materials: Single-use items, decorations, specialized supplies
- Transport: Fuel costs, driver time, vehicle rental fees
⚠️ Note:
Don't include fixed costs like your existing staff or kitchen equipment. Only count expenses tied directly to this specific event.
Determine deposit percentage
Your deposit amount depends on purchasing risk as a percentage of total order value. Higher risk percentages require bigger deposits to protect you.
💡 Example calculation:
Event worth €1,750 with €1,500 purchasing risk:
- Purchasing risk: (€1,500 / €1,750) × 100 = 86%
- Minimum deposit: 86% of €1,750 = €1,505
- Practical: 90% deposit = €1,575
This covers your complete risk plus a small safety buffer.
Typical catering deposit ranges:
- 50-60%: Basic catering with standard fresh ingredients
- 70-80%: Premium events featuring expensive proteins or specialty items
- 80-90%: Complex productions requiring extensive prep and materials
- 100%: Small orders or first-time clients
A pattern we see repeatedly in restaurant financials shows that caterers who calculate deposits based on actual risk rather than industry averages maintain healthier cash flow and fewer write-offs.
Deposit timing
Request your deposit right before you start purchasing. Most caterers need this 3-7 days before the event, depending on supplier lead times and menu complexity.
💡 Practical schedule:
- Upon confirmation: 25-30% (secures client commitment)
- 1 week before event: Remaining deposit up to 70-90%
- After completion: Final balance for any approved changes
Link cancellation terms
Connect your deposit to specific cancellation policies. The closer to the event date, the more deposit you retain.
- More than 7 days: Full refund minus administrative fees
- 3-7 days: 50% refund (ingredients already ordered)
- Less than 3 days: No refund (everything purchased and prepped)
⚠️ Note:
Document your cancellation terms in every quote. Verbal agreements create disputes you'll lose.
Track deposits digitally
Monitor each event: total order value, purchasing risk, deposit requested, and amount received. This data helps you refine your deposit strategy over time.
Tools like KitchenNmbrs calculate exact food costs per person, giving you precise purchasing risk numbers. Accurate risk assessment makes setting appropriate deposits straightforward.
How do you calculate the right deposit? (step by step)
Calculate your food cost per person
Add up all ingredient costs and divide by the number of people. Don't forget to include garnishes, sauces and specialty products.
Add up all extra costs
Add transport, extra staff, materials and packaging to your ingredient costs. This is your total purchasing risk.
Calculate the risk percentage
Divide your total purchasing risk by the order value and multiply by 100. This percentage (plus 5-10% buffer) is your minimum deposit.
✨ Pro tip
Calculate deposits based on a 72-hour purchasing window—the critical period when you commit to ingredients and can't reverse orders. Events requiring specialty items or advance prep need deposits 5-7 days out to cover your full exposure.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What if the client won't pay the deposit?
Explain that you're purchasing ingredients specifically for their event that can't be resold. Without a deposit, you're taking unacceptable financial risk. For established clients, you might offer a slightly reduced deposit but never eliminate it entirely.
Can I keep the deposit lower for large companies?
Large, established companies with solid payment histories may qualify for reduced deposits of 30-40%. However, always get written confirmation and clear payment terms regardless of company size.
What do I do with the deposit if the event is postponed?
Hold the deposit for the new date if postponed within reasonable timeframes due to circumstances beyond their control. Set a maximum postponement period of 6-12 months in your terms to avoid indefinite holds.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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