AvoDeposit Invoice: How to Bill a Deposit and Credit It on the Final Invoice
How to invoice a deposit before a job: what the deposit invoice says, how much to ask for, how to credit it on the final invoice so the client sees the balance, and.
What a deposit invoice is
A deposit invoice asks the client to pay part of the price before the work starts. It references the accepted estimate or contract, states the deposit amount and what it secures, and gives the payment deadline. When it is paid, you issue a receipt, and the final invoice later shows the deposit as a credit.
It is the document that turns a verbal yes into a booked job: the date is held when the deposit clears, not when the client says they want to proceed.
How much to ask for
| Situation | Typical deposit |
|---|---|
| Service only, under a day (cleaning, repairs) | None, or a small booking fee |
| Job with materials you buy up front | Cost of materials, or 30–50% |
| Multi-week project | 25–30%, then progress payments |
| Custom or non-returnable items | 50–100% of the item cost |
| Events and photography | 25–50% non-refundable retainer to hold the date |
| Home improvement in California | Capped by law at 10% or $1,000, whichever is less |
What to put on the deposit invoice
- Title it “Deposit Invoice” or “Invoice: Deposit” so it is not mistaken for the full bill.
- Reference the estimate or contract: “Deposit on estimate 2026-E-07 dated Feb 25, garage framing, $3,084.”
- One line: “Deposit, 30% of contract total” with the amount. If it covers materials, say “Deposit for materials”.
- Due date (usually on acceptance or within a few days), payment methods, and the start date that the deposit secures.
- Whether it is refundable, and until when. Non-refundable retainers must say so before they are paid.
Example deposit invoice lines
| Description | Qty × rate | Amount |
|---|---|---|
| Deposit, 30% of contract total $3,084.30 (estimate 2026-E-07) | 1 | $925.29 |
| Rounded deposit agreed | $1,000.00 | |
| Total due on acceptance | $1,000.00 |
Showing the deposit on the final invoice
- List the full job as if nothing was paid, then add a negative line: “Deposit received Mar 2 (receipt R-2026-03), −$1,000.00”. The total becomes the balance due.
- Never reduce individual lines to absorb the deposit. The client cannot check the math and the deposit disappears from both records.
- If the job was cancelled, the deposit invoice and its receipt are the record of what was kept or refunded; issue a credit note for any refund.
Receipts and bookkeeping
- Issue a receipt the day the deposit lands, referencing the deposit invoice. Clients need it; so does your bookkeeper, because a deposit is a liability until the work is done.
- If you use an invoice app, create the deposit invoice from the estimate so the balance invoice later picks up the credit automatically.
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Questions
Is a deposit invoice a real invoice?
Yes. It has a number, a date and a due date, and it creates a receivable like any invoice. The difference is that it bills part of the price before delivery and is credited on the final invoice.
How do I word a 50% deposit on an invoice?
“Deposit: 50% of contract total $6,400, due on acceptance: $3,200.” On the final invoice: “Deposit received Mar 2, −$3,200.” Both lines reference the estimate or contract number.
Are deposits refundable?
Only if the document says so. A deposit for materials is usually refundable less costs incurred; a retainer that holds a date is usually non-refundable. State it on the deposit invoice and the estimate.
Is there a legal limit on deposits?
For home improvement contracts some states cap them: California at 10% or $1,000, whichever is less; Maryland at one third; Nevada and others have their own rules. For most other work there is no cap, but the deposit must be disclosed before it is paid.
Do I charge tax on a deposit?
In most states sales tax is due when the sale is complete, not when the deposit is received, so the deposit invoice shows no tax and the final invoice taxes the full taxable amount. Check your state's rule if you sell goods.