In one line
Part of the price paid before the work starts, credited against the final balance.
Also called a down payment, money up front, or a booking fee.
What it means in practice
A deposit covers what you spend before the first day on site: materials, non-returnable orders and the first days of labour. It also confirms the client is serious enough to book the calendar.
Put it on the quote as its own line with its own due date, invoice it the day the quote is accepted, and receipt it the day it clears. Some states cap deposits on home improvement work for homeowners, so check the rule where you work before you set a number.
Covered in full in the guide to deposit invoices.
Example. California caps the down payment on a home improvement contract at $1,000 or 10% of the price, whichever is less.
Where it shows up on the paperwork
On the quote it is its own line with what it covers and when it is due. It is then invoiced on its own, receipted when it clears, and named on the final invoice as already paid.
What goes wrong
- Booking the start date when the deposit invoice is sent rather than when the money clears.
- Asking for a round percentage that happens to be under what you spend before day one.
- Not writing down what happens to it on a cancellation, which is the only time anyone asks.
The tools for this
Related terms
- Advance paymentMoney paid before the work is done or the goods are delivered.
- Balance dueThe amount still owed on a job after any deposit or part payment.
- RetainerMoney paid in advance to hold your availability or to draw against for ongoing work.
- Cash flowThe money moving in and out of your business, as opposed to the profit you have earned on paper.
- QuoteA fixed price you are offering for named work, held open until a stated date.
- ReceiptProof that a payment was made, issued after the money arrives.
Common questions
How much deposit should I take?
Enough to cover the materials, non-returnable orders and the first days of labour. Round percentages are fine when they land near that figure, and several states cap deposits on home improvement work.
Is a deposit refundable?
Only as your quote says, within your state's consumer rules. A common position is refundable in full until materials are ordered, then refundable less anything non-returnable bought for the job.
Do I invoice the deposit or just ask for it?
Invoice it. It takes the next number in your normal series, gives the client something their accounts system can pay, and leaves you a record.