Deposit Invoice
An invoice requesting partial upfront payment before work begins or goods are delivered.
Definition
A deposit invoice (or advance invoice) requests partial payment before the full project or order is completed. Deposits are common in service businesses, custom manufacturing, and any situation where significant work must occur before delivery. The deposit amount is typically a percentage (25-50%) of the total project value.
Deposit invoices should clearly state that they represent partial payment, what percentage or phase they cover, and how the balance will be invoiced. The final invoice should reference the deposit paid and show the remaining balance due.
Why It Matters
Deposits protect your business from non-payment on work already completed. Without deposits, you risk completing significant work only to have a client disappear or refuse to pay. This is especially important for custom or non-resalable work where you can't recover value from another customer.
Deposits also demonstrate client commitment. A client willing to put money down is more likely to follow through on the project. The financial commitment creates accountability on both sides and establishes the business relationship on solid footing.
Examples
- 1
A web designer requires a 50% deposit before beginning work, with the remaining 50% due upon project completion.
- 2
A custom furniture maker invoices 25% deposit with order, 50% when construction begins, and 25% upon delivery.
- 3
A venue requires full deposit (50% of total) to hold a date, with the balance due 30 days before the event.
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