In short: To invoice a deposit, raise a normal numbered invoice for the upfront amount, state on it what the deposit secures and what the balance will be, and give it a short due date. When the work is done, raise a second invoice for the balance that references the deposit already paid. Two invoices, two numbers, one job. It is tidier than one invoice paid in halves.
A deposit is the difference between a booked job and a hopeful one. It commits the client, it covers the time you are now not selling to someone else, and on longer projects it means you are not funding someone else’s business for two months.
The example this guide runs on: a €2,000 brand identity project, €800 (40%) upfront to start, €1,200 on delivery. Two invoices, five weeks apart.
For the fundamentals of an invoice itself, start with how to invoice a client as a freelancer. This post is the deposit mechanics.
How much deposit should you ask for?
There is no fixed rule, and anyone who tells you there is has one type of client. What actually drives the number:
- How much of the cost you carry up front. If you are paying for materials, travel, or a subcontractor before you see a penny, the deposit should cover at least that.
- How long the job runs. A two-day job can wait for payment. A two-month job should not.
- How replaceable the slot is. If taking the booking means turning other work away, the deposit is what makes that safe.
- Whether you have worked with them before. A first project with a new client earns a bigger deposit than the fifth with a reliable one.
Common shapes are a third, a half, or 40/60. On longer projects, staged payments often work better than a single deposit: an amount to start, one at an agreed midpoint, and the balance on delivery. The principle is the same, you just raise three invoices instead of two.
Why two invoices, not one invoice paid in halves
This is the part that trips people up, and it is worth being clear about.
It is tempting to raise one €2,000 invoice and let the client pay €800 now and €1,200 later. Avoid it. A single invoice paid in parts means one document whose status is neither unpaid nor paid, and reconciling that later, especially across a year end, is genuinely annoying.
Two invoices is cleaner:
- Each payment has its own numbered document and its own date.
- Each one is simply paid or unpaid, with no half-states.
- Your records show exactly what was owed and when, which is what an accountant needs.
- If the job is cancelled between the two, only the second one is affected.
Tally Crow works this way by design: invoices move forward through a single status, from generated to sent to paid or overdue, so a deposit is its own invoice rather than a partly-settled one.
How to invoice a deposit, step by step
- Agree it in writing first. The amount, when it is due, what it secures, and whether it is refundable. An email thread is enough. The invoice confirms, it does not introduce.
- Raise a normal invoice with its own number, in your usual sequence. A deposit invoice is not a special document type, it is an invoice for a smaller amount.
- Describe what it is on the line. “Booking deposit, brand identity project, 40% of €2,000” tells anyone reading it exactly what happened.
- State the balance on the invoice. A line such as “Balance of €1,200.00 due on delivery” removes every later surprise.
- Give it a short due date. A deposit that secures a start date should be paid quickly. Seven days is normal, and work starts when it clears.
- Add VAT if it applies to you. A deposit is usually treated as consideration for the supply, so VAT often applies at the point you invoice it, but the rules vary. Check yours.
- Send it immediately, and start work when it is paid, not when it is promised.
When VAT falls due on a deposit, and whether a deposit is refundable, depend on your country’s rules and your agreement. Check your obligations, or ask an accountant.
What to put on the balance invoice
Send it the day you deliver, while the work is fresh and the client is pleased with it.
The balance invoice should:
- Carry its own new number, not a version of the deposit invoice’s.
- Reference the deposit: its invoice number and the amount already paid.
- List the work, not just “balance”, so the document stands on its own.
- Show the arithmetic plainly: total, less deposit paid, balance now due.
For the example above:
| Line | Description | Amount |
|---|---|---|
| 1 | Brand identity project: logo, type, colour, usage guide | €2,000.00 |
| 2 | Less deposit paid, invoice 2026-031 | −€800.00 |
| Balance due | €1,200.00 |
Should a deposit be refundable?
That is a commercial decision, not an invoicing one, but say which it is before you take the money. The usual positions:
- Non-refundable, because it compensates you for holding the slot and turning down other work.
- Refundable up to a point, for example until a set date or until work begins.
- Refundable minus costs already incurred.
Whatever you choose, write it in the agreement and repeat it on the invoice. A deposit whose terms were never stated is the one that turns into a dispute.
What if the job is cancelled after the deposit is paid?
Three situations, and only one of them needs a document.
You keep the deposit under your agreed terms. Nothing to do. The deposit invoice was paid and stays paid, and you simply never raise the balance invoice.
You refund some or all of it. Do not edit or delete the paid invoice. Issue a credit note against it for the amount you are returning. The original invoice stays exactly as it was, and the credit note records the refund separately with its own number and date. That is the auditable way to do it.
The job is postponed rather than cancelled. You do not need to move money at all. Issue a credit note against the original, and that unapplied credit can then be deducted on the invoice for the new dates, provided it is in the same currency. The client keeps the value, you keep a clean trail, and nothing is transferred twice.
Tally Crow links a credit note to the original invoice and deducts unused credit on the client’s next one, which is exactly what a cancelled or postponed deposit needs.
Start invoicing freeWhat if the client will not pay a deposit?
Some clients genuinely cannot, usually large organisations whose procurement runs on purchase orders and payment cycles rather than on goodwill. That is not a red flag by itself.
Workable alternatives:
- Stage the payments instead, so you are rarely more than a few weeks of work out of pocket.
- Shorten the payment terms on the final invoice in exchange.
- Scope the first phase small, deliver it, invoice it, and see how they pay before committing to the rest. How a client handles a small invoice tells you most of what you need to know.
A client who refuses any protection at all, on a long project, is telling you something. See how to get clients to pay on time for the wider approach.
Deposits, without the admin
A deposit only helps if it is raised properly: its own number, a clear description, a short due date, and a balance invoice that references it. Tally Crow numbers each one for you, keeps the pair tied to the same client, handles VAT and any currency, and issues the credit note if plans change. Starting free, with 2 invoices a month and no credit card. See features and pricing. For a worked example in a specific trade, see how to invoice as a photographer.
Frequently asked questions
Quick answers to common questions.
Yes. A deposit invoice is an ordinary invoice for a smaller amount, with its own number in your normal sequence. There is no separate document type, and treating it as a proper invoice is what keeps your records straight.
Two. One invoice paid in halves sits in a half-state that is awkward to reconcile, especially across a year end. Two invoices each have their own number, date and clear status, and if the job is cancelled in between, only the second is affected.
A third, a half, or 40% are all common. What matters more than the percentage is that it covers any costs you carry up front and the time you are committing, and that it was agreed in writing before the work started.
Often yes, if you are VAT-registered, because a deposit is usually treated as payment towards the supply. Exactly when VAT falls due varies by country and by what you are selling, so check your own rules or ask an accountant.
It depends on what you agreed. If it is non-refundable and you agreed that up front, you keep it and don’t raise the balance. If you are refunding any of it, issue a credit note against the original invoice rather than editing or deleting it.
You can, but the agreement is what makes the deposit stick. At minimum, get the amount, what it secures, the balance, and whether it is refundable confirmed in writing by email before you invoice.
