Deposit Invoice
Definition
A deposit invoice is an initial bill that collects a portion of the total job cost before work begins, typically to cover materials and secure the customer's commitment.
What Deposit Invoice Means for Your Business
What it means
A deposit invoice is the first check in the door. It covers materials, reserves crew time, and confirms the customer is serious. Deposits usually run 25% to 50% of the total price.
Why it matters
Deposits protect you from cancellations, fund material purchases without a credit line, and test customer commitment. Jobs without deposits are jobs that can vanish the night before the install.
How contractors use it
The contract triggers a deposit invoice the moment the customer signs. Payment can be captured on the spot via card or ACH. Only when the deposit clears does the scheduler release the job to production.
Real-World Example
A roofing contractor collects a 30% deposit on every job. On a $18,500 roof replacement, that is $5,550 upfront which pays for all material and protects against cancellation.
Related Terms
Progress Billing
Progress billing is the practice of invoicing the customer in stages as work is completed on a long project, rather than waiting until the end.
Final Invoice
A final invoice is the last bill on a job, showing the total amount due after applying any deposits and progress payments already collected.
Invoice
An invoice is a billing document that lists the work performed, parts used, and total amount due from the customer.
Estimate
An estimate is a written offer of price and scope that a contractor provides to a customer before beginning any work.
Payment Terms
Payment terms are the written rules that define when and how a customer must pay for services rendered.
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