Prevent unpaid invoices
Deposits: when and why should you request one?
A deposit commits the parties and funds part of the service before completion. It reduces exposure and demonstrates the client’s commitment.
When a deposit is particularly useful
- —New client or limited payment history
- —Long project or upfront costs
- —Bespoke work that cannot readily be reused
- —A large order relative to cash resources
Set a coherent amount
The amount depends on initial costs, timing and risk. It may be combined with milestone billing tied to identifiable deliverables.
- —Record the amount, date and following stages
- —Distinguish the deposit and balance clearly
Avoid misunderstandings
A late note on an invoice is not a substitute for clear prior agreement. Check the appropriate accounting and tax treatment.
- —Common mistake: starting before a required deposit is received
- —Adapt clauses to the contract and applicable law
Conclusion
A deposit is a sensible way to share risk and finance performance, not a sign of distrust.