How to invoice a deposit
How to bill an upfront deposit, show what it covers, and invoice the balance later without confusing the client or your own records.
By Tiny Utility Lab, the team behind FreeInvoicePDF. Updated .
A deposit invoice bills part of the job before you start, or before you order materials. It is still a normal invoice. The difference is the wording: what this payment covers, and what remains later.
When a deposit makes sense
- New client, fixed-fee project.
- You will spend money up front (stock, subcontractors, travel).
- The job can be cancelled after you have already blocked time.
- Creative work with a booking hold, such as a photo session date that keeps other clients out.
Common amounts are 30% or 50% of the agreed fee. Pick a number you both wrote down in the proposal or email thread, not a surprise on the PDF.
What the deposit invoice should say
- A line item such as “Project deposit (40%) - brand refresh for Northwind”.
- The deposit amount as the line total.
- Notes that name the full project fee and the balance due later.
- A due date, often due on receipt or Net 7.
- Your payment details, same as any other invoice.
Example note: “Deposit against the $8,000 brand refresh agreed 2 September. Balance of $4,800 will be invoiced on delivery.”
Keep the line description specific. “Deposit” alone is weak. Name the project, the percentage or amount, and what triggers the balance invoice (delivery, go-live, session complete).
Deposit now, balance later
Use two invoice numbers. The deposit is 1080. The final is 1081. On the final invoice, show the remaining work or the remaining fee, and mention that invoice 1080 already collected the deposit. Once the balance is in, you can make a paid invoice that shows a zero balance.
| Document | Line description | Amount |
|---|---|---|
| Invoice 1080 | Deposit 40% - brand refresh | $3,200.00 |
| Invoice 1081 | Balance 60% - brand refresh | $4,800.00 |
Some people put the full fee on the final invoice and then a negative line for “less deposit paid”. That works if the arithmetic is obvious. Do not hide the deposit so well that finance cannot see it was already paid.
In FreeInvoicePDF, enter a deposit already received in Amount already paid on the final invoice, then say so in the notes (date paid and which deposit invoice it matches). The PDF shows it under Total, followed by the balance due the client still owes. For open balances after a part payment mid-job, see partial payments and balances.
Agree it in writing before you bill
A deposit invoice should not be the first time the client sees the percentage. Put the deposit amount in the proposal, estimate, or email that books the work. When you send the PDF, it should feel like paperwork for something already agreed, not a new demand.
- What the deposit covers (materials, booking hold, first phase).
- Whether work starts only after payment clears.
- When the balance will be invoiced.
- Whether any part of the deposit is non-refundable if they cancel.
Deposits vs retainers vs milestones
A deposit is usually once, at the start. A retainer repeats. A milestone is tied to a finished stage. If your job uses stages after the deposit, read retainer and milestone invoices.
Refunds and cancelled work
Whether a deposit is refundable is a contract question, not an invoice layout question. If work stops and you keep part of the deposit, say so in writing and issue a credit or a final statement that matches what you agreed. If you return money, keep both the original deposit invoice and a record of the refund for your own books.
Tax treatment of deposits also varies by place. Do not copy a stranger’s tax line. Ask someone licensed where you file if you are unsure.
What not to do
- Bill a deposit on an estimate PDF. Estimates are not bills. Use an invoice labelled as a deposit, or wait until the scope is agreed.
- Reuse the deposit invoice number for the balance. Two payments, two numbers.
- Start expensive work before the deposit clears when your agreement said you would wait.
- Leave the balance plan out of the notes so the client has to guess what they will owe later.
Checklist before you send the deposit bill
- The percentage or amount matches the written agreement.
- The project name is specific enough to recognise.
- The balance plan is written in the notes.
- The invoice number is new.
- You are ready to wait for payment before starting, if that was the deal.
- Payment details are complete so the client does not need a follow-up email to pay.
Build the PDF in the browser invoice generator, start from the freelance invoice template, or use the photographer invoice template when the deposit holds a session date. We fund the site with labelled advertising. Free forever and ad-supported, with no account, no paywall, and no watermark on the file you export.