Deposit Invoice: How to Ask for Payment Upfront

A deposit invoice asks a client to pay part of the price before work starts. For new clients, custom work, and anything where you buy materials upfront, it's normal practice. It protects your cash flow and filters out clients who aren't committed.

How much to ask for

Situation	Typical deposit
Freelance creative or tech project	25–50%
Web or app build	30–50%, then milestones
Custom goods, furniture, printing	50%, sometimes 100%
Weddings and events	25–50% retainer at booking
Trades and home improvement	10–50%, subject to state or local limits
Retainer relationships	First month in advance

Where you have a choice, pick a deposit that at least covers your out-of-pocket costs (materials, subcontractors) and some of your time.

Some places regulate deposits for certain industries. For example, California limits home improvement contractors to 10% of the contract price or $1,000, whichever is less. Check the rules for your trade and location.

What the deposit invoice should say

• Deposit invoice (or "Invoice: deposit") as the title or in the description
• A normal invoice number from your sequence
• Reference to the quote or contract it relates to
• The deposit amount and what it represents
• When it's due (usually on receipt or within a few days, since work starts on payment)
• Whether it's refundable

Example

Description	Qty	Rate	Amount
40% deposit for kitchen cabinetry per quote Q-0231 (total $12,500)	1	$5,000.00	$5,000.00
Total due			$5,000.00

Deposit due on receipt. Materials will be ordered on payment. Deposit is non-refundable once materials have been ordered.

The final invoice

Bill the full price, then subtract the deposit:

Description	Qty	Rate	Amount
Kitchen cabinetry: supply and installation per quote Q-0231	1	$12,500.00	$12,500.00
Additional: extra wall unit (change order CO-2, approved 2 Sept)	1	$640.00	$640.00
Total			$13,140.00
Less deposit paid (INV-0240, 12 Aug)			−$5,000.00
Balance due			$8,140.00

In the generator, put the deposit in "Already paid (deposit)" and the balance due is calculated for you.

Refundable or not?

Decide before you ask, and put it in the contract:

• Non-refundable deposits (often called retainers) compensate you for reserving time or buying materials. Common for weddings and custom goods.
• Refundable deposits may be returned if the client cancels before a certain point.

Consumer protection laws in some places limit how much of a deposit can be kept on cancellation, typically to your actual losses. "Non-refundable" in your contract doesn't always override that.

Tax on deposits

• UK and EU: receiving a deposit often creates a tax point for VAT. If you're VAT-registered, you may need to issue a VAT invoice for the deposit and account for the VAT in that period.
• US: sales tax on deposits depends on the state and whether the sale is of taxable goods.

If you're registered for VAT or sales tax, check with your accountant how deposits should be handled.

Asking for it without awkwardness

Present the deposit as a normal part of your process, not a special condition:

My standard terms are a 40% deposit to book your project, with the balance due on completion. Once the deposit is received, I'll confirm your start date.

Clients who've worked with professionals before will expect it. Clients who push back hard on a reasonable deposit are often the ones who'd pay late anyway.