Deposit Invoices: How to Bill a Deposit and the Balance

A deposit is the simplest protection a freelancer has: the client pays part of the price before you start, and you never carry the whole project on credit. The paperwork is simple too, once you pick a method. This guide covers how much deposit to ask for, when to ask, how to word it on a quote, the two ways to invoice a deposit and the balance, how to record partial payments, and how to bill bigger projects in milestones.

Everything here is general information, not legal or tax advice. Deposit rules can differ by trade and by country, so check anything that matters for your business with an accountant or a lawyer.

What a deposit invoice is

A deposit invoice is a normal invoice for an agreed part of the price, sent before the work starts. It has its own invoice number, a date, a due date and one clear line saying what it is for. You may also see it called an upfront payment, a down payment or an advance payment.

A few things a deposit invoice is not:

• Not a quote. The quote (or contract) sets the full price and the deposit terms. The deposit invoice asks for the money.
• Not a receipt. A receipt confirms you were paid. The invoice comes first.
• Not a retainer. Lawyers use "retainer" for money held against future fees, and freelancers use it for an ongoing monthly fee. A deposit is part of a fixed price, paid early and counted toward the total. If you bill monthly, read our guide on how to bill retainer clients.

The deposit is always credited against the project total. The client pays the total once, in two or more parts.

How much deposit should a freelancer ask for?

Most freelance guides and contract templates land between 25% and 50% of the project total, paid before work starts. Where you sit in that range depends on how much risk you carry. These are conventions, not rules:

Situation	Common deposit	Why
Small job of a few hundred dollars	Full payment upfront	Two invoices for a small amount is more admin than it saves
New client, first project	50%	You have no payment history with them yet
Repeat client who always pays on time	25%, or none	The risk is lower, so you can keep things easy
Large or long project	25% to 33%, then milestones	One big deposit is a hard ask, and milestones keep you close to the money
You buy materials, prints, travel or licences	Those costs in full, plus a fee share	You should not fund the client's costs out of your own pocket
Rush job that pushes other work aside	50% to 100%	You are giving up other bookings to fit it in

A useful test: how much unpaid work could you lose without real damage? Set the deposit, and the milestones after it, so that you are never further ahead of the money than that.

Some regulated trades have legal limits on deposits, for example home improvement contracts in some US states. If you work in a licensed trade, check your state's rules before you set a percentage.

When to ask for the deposit

Timing matters more than the exact percentage. A deposit that shows up as a surprise on the first invoice feels like a demand. One the client agreed to on day one is just part of the deal.

1. Mention it in the first conversation about price. "My standard terms are 40% to book the project and the balance on delivery" sounds normal, because it is.
2. Put it in writing in the quote or contract, as an amount and a due date, not only a percentage.
3. Send the deposit invoice as soon as the client accepts. The sooner it goes out, the sooner it gets paid.
4. Make it due before your start date, with a few days' margin for a bank transfer to arrive.
5. Start when the deposit arrives, not before. If you start without it, you have given the client credit, which is exactly what the deposit was meant to avoid.

How to word the deposit on your quote

Your quote should answer five questions about the deposit: how much, when it is due, what it secures, whether it can be refunded, and when the balance is due. Here are three examples you can adapt.

A designer, 40% to start:

Deposit and payment schedule. A deposit of 40% ($2,080.00) is due when you accept this quote and books the project in my calendar. Work starts once it is received. The deposit counts toward the project total of $5,200.00. The balance of $3,120.00 is invoiced on delivery and due within 14 days.

A photographer holding a date:

Booking deposit. A $1,000.00 deposit holds your date and is deducted from the package price of $3,400.00. The balance of $2,400.00 is due 14 days before the wedding.

A developer, three stages:

Payment schedule. Project total $9,600.00, invoiced in three parts: 30% ($2,880.00) on acceptance, 40% ($3,840.00) when you approve the working beta, and 30% ($2,880.00) at launch. Each invoice is due within 7 days, and each stage starts once the previous invoice is paid.

Decide your refund terms before you send the quote, not when a client cancels. Common choices are a full refund until a set date, no refund once work has started, or a refund minus the time already spent. Write down the one you pick, and apply it the same way to every client. If large amounts are at stake, have your contract template reviewed, because what a "non-refundable" deposit means in practice depends on your contract and local law.

For the rest of the quote (scope, exclusions, revision rounds and validity date), see quote vs estimate.

Two ways to invoice a deposit and the balance

There are two clean ways to handle the paperwork. Both are common, and both work, as long as the deposit is never billed twice.

	A: Deposit invoice, then a balance invoice	B: One invoice, deposit recorded as a partial payment
Documents	Two, or one per milestone	One
What the client sees	Each invoice's total is the amount to pay now	The full price, with the deposit terms in the notes
Works well for	Business clients with an accounts payable team, larger projects	Individuals and small clients, bookings, short jobs
Watch out for	Referencing the deposit on the balance invoice	One due date for two payments; clients paying the full total by mistake
Tracking	Two invoices to follow until paid	One invoice stays open, with the balance, until it is paid

Option A: a deposit invoice, then a balance invoice

The deposit invoice bills only the deposit. Its total is the amount the client pays now, and the line says what the deposit is part of:

Description	Qty	Rate	Amount
Brand identity and website, 40% deposit per quote DEV-0012 (project total $5,200.00)	1	$2,080.00	$2,080.00
Total due on receipt			$2,080.00

Add a note such as "Work starts once this deposit is received. The balance of $3,120.00 will be invoiced on delivery."

The balance invoice gets its own number and shows how the balance was worked out. The clearest layout restates the total and subtracts the deposit:

Description	Amount
Brand identity and website, project total per quote DEV-0012	$5,200.00
Less deposit paid November 10, 2026 (invoice INV-0051)	−$2,080.00
Balance due	$3,120.00

If your tool does not take a negative line, or your accountant prefers each invoice to bill only what is new, use one line for the balance and put the history in the description: "Brand identity and website, balance after the 40% deposit paid on INV-0051. Project total $5,200.00." Either way, the client can see that deposit plus balance equals the price they accepted.

Option B: one invoice, deposit recorded as a partial payment

Here you turn the accepted quote into one invoice for the full price, with the payment schedule in the notes:

Booking deposit of $1,000.00 due on receipt to hold your date. Balance of $2,400.00 due February 28, 2027.

When the deposit arrives, you record it as a partial payment against that invoice. The invoice stays open with a balance of $2,400.00 until the rest is paid, and you never have to work out which of two invoices is which.

The trade-offs are real. An invoice has one due date, so the deposit date lives in the notes, and some clients will only look at the total and pay all of it (a nice problem, but one to explain). If you are registered for VAT or GST, check one more thing: in some systems, issuing an invoice for the full amount can make the tax on that full amount due from the invoice date, even before you are paid.

Sales tax, VAT and GST on deposits

If you charge tax, a common approach is to put the tax on each invoice for the amount that invoice bills, so the deposit invoice and the balance invoice together add up to the full price including tax. When tax becomes due on a deposit is a local rule, so check it where you are registered or ask your accountant. The tax words and required details also change by country: see what an invoice must show in the UK, Canada and Australia.

How to record a partial payment and show the remaining balance

A partial payment does not change what the client owes in total. It only changes what is still open. Whether it is a planned deposit or a client paying half of an invoice without warning, handle it the same way:

1. Record the payment against the original invoice: the amount, the date and the payment reference.
2. Never edit the invoice total down to match what was paid. The invoice you sent stays as it was.
3. Confirm in writing, with the amount received, the total paid so far, the balance and its due date.
4. Chase the balance, not the total. A reminder that asks for the original amount after a client has paid half is confusing and can lead to a double payment.
5. Mark the invoice paid only when the balance reaches zero.

Here is a short confirmation you can adapt:

Subject: Payment received for INV-0063, balance $2,400.00

Hi Priya,

Thank you, your $1,000.00 deposit arrived on November 12 and is recorded against invoice INV-0063 (wedding photography package, $3,400.00).

The balance is $2,400.00, due February 28, 2027, as agreed. Your date is booked.

Thanks, Leo

When the balance falls due, keep the reminder about the balance: "Just a reminder that the $2,400.00 balance on INV-0063 is due on February 28. Your $1,000.00 deposit is already recorded, so this is the only amount left." For the follow-ups after that, see our payment reminder email templates.

What to put on an invoice for the remaining balance

Whichever option you chose, the request for the balance should let the client's bookkeeper match it without emailing you. Check that it shows:

• Its own invoice number, in your normal sequence (Option A), or the original invoice number (Option B)
• A reference to the quote, and to the deposit invoice if there was one
• The project total
• The deposit or payments already received, with dates
• The balance as the amount to pay now
• A due date written as a date, and your payment details

The mistakes to avoid are few and easy to spot: a balance invoice that quietly bills the full amount again, a deposit that was paid but never invoiced (so the money has no paper trail), and descriptions that differ so much between the two invoices that they look like different projects.

Milestone payments for bigger projects

On a project that runs for months, one deposit at the start leaves you exposed for a long time. Milestone billing splits the price into stages, each invoiced when something specific happens:

Invoice	Trigger	Share	Amount
INV-0071	Quote accepted	30%	$2,880.00
INV-0079	Client approves working beta	40%	$3,840.00
INV-0086	Launch	30%	$2,880.00
Total		100%	$9,600.00

A few rules keep milestones from turning into arguments:

• Tie each milestone to an event the client can see, such as an approved design or a launch, not "when I'm halfway".
• Add a backstop date. If feedback stalls for weeks, the milestone is invoiced on a set date anyway. Otherwise a slow approval becomes a slow payment.
• Show the running picture on each invoice: "Milestone 2 of 3. Project total $9,600.00; previously invoiced $2,880.00."
• Start the next stage once the previous invoice is paid, if your terms say so.

For more examples of fixed-fee and milestone line items, see how to make an invoice as a freelancer. For the payment terms that go with each stage (due on receipt, net 7, net 15), see invoice payment terms explained.

When the client cancels or the scope changes

• The client cancels. Apply the refund terms you wrote in the quote, and confirm in writing what happens to the deposit. If you refund part of it, ask your accountant how to record it (many use a credit note).
• The scope grows. Price the extra work separately, with a revised quote or a short change order, before you do it. Do not quietly add it to the balance invoice.
• The deposit is late. Do not start. Send a friendly reminder and, if needed, move the start date.
• The client pays an odd amount. Record it as a partial payment, then confirm the balance in writing as shown above.

Key takeaways

• A deposit of 25% to 50% is the usual range; small jobs are often paid in full upfront, and long projects in milestones.
• Agree the deposit early, write it on the quote as an amount and a due date, and decide refund terms before anyone pays.
• Either send a deposit invoice and then a balance invoice, or issue one invoice and record the deposit as a partial payment.
• Never bill the deposit twice: the balance invoice shows the total, what was paid and what is left.
• Record partial payments against the invoice, confirm the balance in writing, and chase only the balance.

How Clodou helps

Clodou has no separate deposit document type. You use one of the two methods above, by chat, and Clodou keeps track of the balance.

• One invoice, deposit as a partial payment. When the client accepts quote DEV-0012, type "Turn DEV-0012 into an invoice and record the $1,000 deposit Priya paid." Clodou creates the invoice from the quote in one step (same client, lines, tax and currency) and prepares the payment as an approval card. Once an owner or admin approves it, the invoice shows what has been paid so far and the balance due. If the balance is still open after the due date, the invoice appears when you ask "Who owes me money?", with the balance still owed rather than the original total. Payment reminders that Clodou prepares ask for that balance too, and by default none is emailed until an owner or admin approves it.
• A separate invoice per stage. Type "Invoice Northwind $2,080 for the 40% deposit on quote DEV-0012, project total $5,200." Clodou does not split a quote into stages by itself, and it never invents an amount: give it the amount for each stage, and it asks if one is missing. Do the same for each milestone and for the balance, with the earlier invoice numbers in the description.

Invoices come out as branded PDFs with your logo, your deposit terms in the notes, your country's tax words (sales tax, VAT, GST or GST/HST) and the currency you choose, never converted. The PDF shows the invoice total; payments and the balance are tracked in Clodou, so send a short confirmation like the one above when a deposit arrives. Clodou does not process card payments: on the Team plan, it prints your own payment link on the invoice. Every new workspace starts with a 14-day trial of Team, no card required. After that, the Free plan includes 20 AI requests and 3 quotes or invoices a month; Solo is $29 a month and Team $79 a month, per workspace.