Decide when a deposit makes sense
A deposit is most useful when a job needs materials ordered in advance, a slot reserved in your schedule, or several stages of work. Explain the reason and the amount before the customer approves the estimate.
Rules on deposits differ by location and type of work, and some places cap how much a contractor can ask for upfront. Check what applies to your business before setting a standard amount.
Put the terms in writing
Show the deposit amount or percentage, when it's due and how it counts toward the final balance. Avoid vague wording such as “payment as discussed.”
Keep the estimate total visible alongside the payment schedule. The customer should always be able to see the full price of the job, not just the next amount you're asking for.
An example payment schedule
A deck build split into three payments might be laid out like this on the estimate:
| Stage | Due | Amount |
|---|---|---|
| Deposit (30%) | On approval | $1,440.00 |
| Progress payment (35%) | Framing complete | $1,680.00 |
| Final payment (35%) | On completion | $1,680.00 |
| Job total | $4,800.00 | |
Record each payment as it arrives
When money comes in, note the date, the amount and how it was paid, and apply it to the right job and customer. If the customer pays in parts, record each one separately instead of overwriting the original total with a changing number.
Show the balance on the final invoice
On the final invoice, list the full job total, each payment already received and the amount still due. Laid out this way, the arithmetic is easy to check and nobody wonders whether the deposit was counted.
- The recorded payments add up to what you actually received.
- The balance matches the agreed schedule.
- A copy is saved with the estimate and the job history.
Invoicing isn't collecting. An invoice tells the customer what they owe, but it doesn't take the money for you. State your accepted payment methods and instructions on the invoice.
