How to Invoice for a Deposit and Balance
Taking money upfront protects you on bigger jobs — but only if the paperwork is tight. Invoice the deposit, then credit it cleanly on the balance so nobody loses track.
In this answer
- Raise a clear deposit invoice tied to the agreed job
- Credit the deposit correctly on the final balance invoice
- Keep both invoices linked for clean reconciliation
- Decide what the deposit covers and whether it is refundable
- Apply GST consistently across the deposit and balance
6 min
Raise a deposit invoice, not a vague request
A deposit should be a proper invoice, not a one-line text saying 'send me $500'. Label it clearly — 'Deposit invoice' — reference the job or quote it relates to, and state what the deposit secures: your booking, materials ordering, or a slot in your schedule.
Showing the full job value for context helps: 'Total job: $5,000 — Deposit (20%) now due: $1,000'. The client sees the deposit is a portion of a known total, not an arbitrary ask, and they know exactly what is still to come. That transparency is what makes people comfortable paying upfront.
Credit the deposit on the balance invoice
When the job is done, your balance invoice must clearly net off what was already paid. The cleanest format shows the full value, then subtracts the deposit.
- Total job value: $5,000
- Less deposit paid (invoice #INV-101, 1 June): -$1,000
- Balance now due: $4,000
Referencing the deposit invoice number and date removes any doubt. A client should never have to do their own subtraction to work out what they owe — do it for them on the page.
Be clear on refundability and what it covers
Disputes over deposits usually come down to one question: was it refundable? Decide this before you take the money and put it in writing — in your quote, your terms, or the deposit invoice itself. A non-refundable deposit that covers materials you have already ordered is reasonable; the client just needs to have agreed to it knowingly.
If a job is cancelled, refer back to that written term. A deposit that is clearly described upfront protects both sides: you are covered for committed costs, and the client knows the rules of the game before they pay.
What to include across both invoices
For the deposit and the balance alike:
- 'Tax Invoice' (GST if registered) and a unique number on each
- Your business name and ABN
- Client name and the job or quote reference
- The full job value for context
- On the deposit: amount due and what it secures
- On the balance: the deposit credited, with its invoice number and date
- GST treated consistently across both
- Payment details and due dates
Generate both from the same layout with the free Invoice Generator so the numbering and format stay consistent.
Key takeaways
- Make the deposit a proper, numbered invoice that names the job
- Show the full job value so the deposit reads as a portion, not an ask
- Credit the deposit on the balance invoice and reference its number
- Agree refundability in writing before taking any money
- Keep GST consistent and numbering sequential across both invoices
Frequently asked questions
Do I charge GST on the deposit or only the balance?
If you are GST-registered, GST generally applies when the deposit forms part of the price of a taxable supply. Treat it consistently across both invoices. This is general information — confirm the timing of GST on deposits with your accountant.
How big should a deposit be?
It depends on your costs and the job. Many businesses take 10–50% to cover materials and secure the booking. Pick a figure you can justify and that the client agrees to before work or ordering begins.
What if the client never pays the balance?
You still keep the deposit (subject to your terms), and the unpaid balance becomes a debt you can pursue. A clear statement of account is a good first step before escalating.
Build a compliant invoice in minutes
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.