How to Invoice for Deposits and Final Payments

Short answer: To invoice for deposits and final payments, send a deposit invoice for an agreed percentage (usually 30–50%) before work starts, record it as a paid advance, then send a final invoice that lists the full project value, subtracts the deposit already paid, and shows the remaining balance due.

Why deposits matter

A deposit protects your cash flow and filters out clients who were never going to pay. It funds the work you do before any money arrives, and it signals that your time is a real commitment, not an option the client can quietly cancel.

Typical deposit sizes:

Type of work	Common deposit
Small freelance project (< 1 week)	25–30%
Multi-week design or development project	40–50%
Long retainer or build with material cost	50% + milestones
Event, wedding, or booked-date work	25–50%, non-refundable

Step 1 — Put the deposit in the agreement first

Before any invoice, your proposal or contract should state:

• The total project fee.
• The deposit amount and whether it is refundable.
• What triggers the final payment (delivery, launch, handover).
• Payment terms — Net 7, Net 14 or due on receipt.

If the deposit is not written down, chasing it later becomes a negotiation.

Step 2 — Send the deposit invoice

A deposit invoice looks like a normal invoice with a few differences:

• Line item labelled "Deposit — 40% of project fee" rather than the full scope.
• A note stating the deposit is applied against the final balance.
• A clear due date, ideally before the project start date.
• Your usual invoice number sequence — deposits still need sequential numbering.

Example wording for the notes field:

This deposit of $1,200 represents 40% of the agreed project fee of $3,000. It is credited in full against the final invoice. Work begins on receipt of payment.

Step 3 — Track milestone payments (optional)

For longer projects, split the middle. A common three-part structure:

1. 40% deposit on signature.
2. 30% at an agreed midpoint (design approval, staging site live).
3. 30% on final delivery.

Each stage gets its own invoice so you never carry more than a third of the project unpaid.

Step 4 — Send the final invoice with the deposit deducted

The final invoice should show the full picture, not just the remaining amount. That prevents "wait, what am I paying for?" emails.

Description	Amount
Website design and build (agreed fee)	$3,000.00
Less: deposit received 12 Jan 2026 (INV-0104)	−$1,200.00
Balance due	$1,800.00

Reference the deposit invoice number so both documents reconcile in the client's accounting system.

Deposit and final payment wording you can copy

Requesting a deposit:

Thanks for confirming the project. I have attached the deposit invoice for $1,200 (40%). Once it is settled I will book your start date for 3 February and send the project schedule.

Sending the final invoice:

The project is complete and the files are handed over. The final invoice is attached — it shows the full fee less the deposit you already paid, leaving a balance of $1,800 due by 28 February.

Chasing a late final payment:

Just a quick reminder that invoice INV-0118 for $1,800 was due on 28 February. Could you confirm the payment date? Happy to resend the invoice if it helps.

Common mistakes to avoid

• Not numbering deposit invoices — they are legal documents and must sit in your sequence.
• Forgetting the deduction — invoicing the full amount again causes disputes and delays.
• No tax treatment — in most VAT/GST regimes tax is due on the deposit when it is paid, not at the end. Show the tax on the deposit invoice.
• Verbal deposit terms — always in writing.
• Handing over final files before final payment — deliver a preview or watermarked version until the balance clears.

Do it automatically in Invoxa

Invoxa lets you create a deposit invoice, mark it paid, and then generate the final invoice with the deposit deducted automatically — including partial payments, custom tax labels and payment reminders. See our deposit invoice template and the guide to partial payments.

FAQ

Is a deposit invoice the same as a proforma invoice? No. A proforma is a quote-like document with no accounting value. A deposit invoice is a real tax invoice for an amount actually due.

Should a deposit be refundable? Most freelancers make deposits non-refundable once work starts, but refundable if the project is cancelled before the start date. State the rule in the contract.

How do I record the deposit in my books? Record it as income (or a customer advance, depending on your accounting method) when received, then reduce the final invoice by the same amount so the total is only counted once.

What if the client wants to pay everything at the end? Offer a small discount for full upfront payment instead, or shorten the payment terms. Doing multi-week work with zero money down is the most common cause of freelancer bad debt.