A deposit invoice does two jobs: it funds the materials, and it tells you whether the customer is serious. Both matter, and the second one is the reason experienced trades ask even when cash flow is fine.
How much to ask for
There is no universal figure, but the common shapes are:
- A third, for service work with modest materials.
- Half, for design and build, or anything with a long lead time.
- The cost of materials, where you are buying stock specifically for the job.
- Nothing, for small jobs and established customers.
Pick a policy rather than deciding per customer, and put it on the quote rather than raising it after acceptance.
The document order
This is where people get tangled, because it is not the order they expect.
- Deposit requested, on the quote or as an invoice for the deposit alone.
- Deposit paid. Issue a receipt.
- Work completed. Invoice the full amount, showing the deposit already paid.
- Balance paid. Issue a second receipt.
Four documents, each doing one job. Receipt or invoice explains why compressing this into two causes problems in the customer’s accounts.
Show the arithmetic
Never leave the customer to work out what they still owe.
Description Amount
Fitted wardrobe, per quote QTE-0044 340,000
Subtotal 340,000
Deposit paid 6 Aug (100,000)
Balance due 5 Sept 240,000Add the Amount paid row from the totals block and the balance is calculated for you. A customer who can see the deduction does not email asking.
Staged payments on longer jobs
For work running over weeks, stages beat one bill at the end. Tie each stage to something visible rather than to a date.
Stage 1 On acceptance 30%
Stage 2 On delivery of materials to site 40%
Stage 3 On completion and sign-off 30%Milestones the customer can see happening are milestones they pay against without argument. A date-based schedule invites a conversation about whether the work has kept pace.
Invoice each stage properly
Each stage gets its own invoice with its own number, referencing the quote. Do not send one invoice and ask for it in pieces, which leaves the customer’s accounts unable to record anything cleanly.
Show the running position on each: what has been invoiced, what has been paid, what remains.
When a job is cancelled
This is what the deposit is for, and it only works if you said so in advance.
Put one line in your terms covering what happens: whether the deposit is retained, retained in part, or returned less costs incurred. Vague terms here are unenforceable and, worse, produce an argument with someone who was previously a customer.
If you do return part of it, issue a credit note against the deposit invoice and then make the refund. Credit note or refund covers why those are two separate events.
Asking without apologising
The wording matters less than the timing. A deposit mentioned at quote stage is a term. A deposit raised after acceptance is a renegotiation.
One line on the quote is enough: “A deposit of one third is payable on acceptance, with the balance due on completion.”
Customers who will not pay one
They are telling you something. Not always that they cannot pay, but always that they are not yet committed.
For a small job, proceed and take the risk knowingly. For a large one, or a new customer, treat it as information. Getting paid on time covers the rest of the picture.
Deposits on goods versus deposits on labour
The distinction matters more than people expect.
On goods, a deposit is usually funding a purchase you are about to make. If the customer cancels, you may already hold stock, and the deposit is offsetting a real cost. That is easy to explain and rarely contested.
On labour, the deposit is securing your time. Nothing has been bought, so a retained deposit is harder to justify unless you turned other work away, which is exactly what your terms should say.
Write the reason into the terms. A deposit with a stated purpose survives a difficult conversation; one without a purpose reads as an arbitrary charge.
Getting paid before delivery, without an invoice
Sometimes the customer needs a document to release funds but you are not ready to issue an invoice, because the goods have not shipped or the work has not started.
That is what a proforma invoice is for. It looks like an invoice, carries the same figures, and is explicitly not a demand for payment against a completed supply, so it does not enter either party’s accounts as one. What is a proforma invoice covers when to reach for it.
Tax on a deposit
This catches people out. In many jurisdictions a deposit creates a tax point when it is received, not when the job completes, which means the tax is due earlier than you planned for.
Rules vary and the difference is real money, so confirm it where you trade rather than assuming. If it applies, the deposit invoice needs to show tax properly rather than being treated as a placeholder.
Keep the deposit visible on every later document
The customer should never have to remember what they paid. Carry it forward onto the invoice, onto the statement of account, and into any revised quote.
A deposit that disappears from the paperwork is a deposit somebody will eventually try to pay twice, or forget to deduct.
Set up the deposit invoice
Open the invoice maker, add the Amount paid row, and save a template with your deposit terms in the notes. The next job is then a two minute job.