TUTORIAL

How to Invoice a Deposit or Partial Payment and Show the Balance Due

A job paid in two parts needs two invoices: one for the deposit before you start, and a final invoice for the full job that subtracts what was already paid. Done that way, the client sees the whole price once, and nobody is confused about what is still owed.

Connery Davoodian · Founder, Fynl · 2026-10-20

WHAT THIS ADDSMost templates show a single "deposit" line and leave the final invoice to guesswork. This one shows both documents for the same job with the numbers carried across, explains why the final invoice lists the full job (and what HMRC says about deposits and tax), and gives the exact fields to use in a free generator.

Open the free invoice generator Download the deposit and balance invoice template (PDF)

Invoices — 1:21, narrated, filmed in the real builder

Two ways to bill a staged job, and the one that confuses nobody

When a job is paid partly up front, there are two common ways to do the paperwork. One is to invoice the deposit, then invoice "the remaining 50%" as a single line at the end. It works, but the final invoice never shows the whole job, so the client cannot see what they bought, and a later question about one item means digging out two documents.

The clearer way is to invoice the deposit as its own small invoice, then, at the end, invoice the full job item by item and subtract what has already been paid. The final invoice shows the full price, the deposit received and the balance due. It is the version accountants and clients both find easiest to check, and it is what the free generator's Amount already paid field is for.

A worked example: a $2,400 job with a 50% deposit

A muralist quotes $2,400 for a kitchen wall, with a 50% deposit to book the dates and buy paint, and the balance on completion. No tax applies in this example.

Deposit invoice, INV-0041, sent when the quote is accepted:

Description	Qty	Unit price	Amount
Deposit (50%) for kitchen mural, per quote EST-0012	1	$1,200.00	$1,200.00
Total, due on receipt			$1,200.00

Final invoice, INV-0047, sent when the wall is finished:

Description	Qty	Unit price	Amount
Design and colour proofs	1	$400.00	$400.00
Kitchen mural, painting (days)	4	$450.00	$1,800.00
Paint and sealant	1	$200.00	$200.00
Total			$2,400.00
Amount paid (deposit, INV-0041)			−$1,200.00
Balance due			$1,200.00

The client pays $2,400 in total, sees every part of it once, and the final invoice tells them exactly what is left.

One job, two invoices: the deposit up front, the full job at the end with the deposit subtracted.

Deposits and tax

If you charge sales tax, VAT or GST, deposits have their own timing rules. HMRC's VAT guide (Notice 700) says most deposits serve as advance payments and create a tax point when you receive them, which means VAT is due on the deposit at that point, not only when the job is finished. A refundable security deposit, such as one taken against damage to hired equipment, is treated differently. Other countries and US states have their own rules, so check with your tax office or accountant before you invoice a taxed deposit.

Whatever the tax rules, keep both invoices. The IRS page on what records to keep lists invoices among the documents that support your gross receipts, and a deposit invoice is part of that record.

Step by step in the free invoice generator

1. Agree the deposit in the quote

State the deposit amount or percentage and when the balance is due. The free estimate maker has room for it in the terms.

2. Make the deposit invoice

In the free invoice generator, add one line: "Deposit (50%) for [job], per quote [number]", quantity 1, the deposit as the unit price. Set Payment due to On receipt, download the PDF and send it.

3. Record the payment

When the money arrives, note the date and amount against the invoice number, on the plan that comes with this guide or in your own register.

4. Make the final invoice for the full job

Press New invoice, which moves the number on by one. List every item of the whole job at full price, and add tax, discount or shipping as usual.

5. Enter the deposit as Amount already paid

Under Tax, discount and shipping, type the deposit into Amount already paid. The invoice now shows Amount paid and Balance due under the total, in the PDF as well as the preview. If the client paid in more than two stages, enter the total of everything received.

6. Reference the deposit invoice

In Notes, write "Deposit of $1,200.00 received on [date] against invoice INV-0041." That one line answers the question the client's accounts person would otherwise ask.

If the job is cancelled after the deposit

Decide in the quote, before anyone pays, what happens to the deposit if the client cancels: refundable, refundable up to a date, or non-refundable because it covers time you have reserved and materials you have bought. Write it in the terms, and repeat it on the deposit invoice in one line.

If you refund the deposit, record the refund against the deposit invoice and, if you are registered for VAT, follow your tax office's rules for adjusting it. If you keep it, keep the invoice as it is. HMRC's notice says VAT is due on deposits that are part payment for a supply, and that a retained payment for a supply the customer fails to take up cannot be reclassified as outside the scope of VAT. Other tax systems differ, so check yours.

Either way, the paperwork stays simple because the deposit was its own numbered invoice from the start.

When the deposit should collect itself

The slow part of a deposit is waiting for it before you can book the dates. In Fynl an accepted quote can go straight to a deposit or full invoice with a payment link, the client pays through your own Stripe account, payments are recorded against the invoice, and reminders chase whatever is left. The video above shows the Invoices screen. The Starter plan is $49 a month.

For the rest of the invoice, read how to make an invoice for freelance work and which payment terms to use. Every free tool is on one page.

DO THISInvoice the deposit as its own numbered invoice that names the job, then invoice the full job at the end with the deposit in Amount already paid, so the balance due is the only number left to pay.

KEEP ITA one-page plan for a job paid in stages: the deposit invoice, the final invoice, the wording for each, and a payment record. Download the deposit and balance invoice template — free PDF, no sign-up.

Questions people also ask

How do I invoice for a deposit?

Send a separate numbered invoice with one line naming the job and the deposit amount, due on receipt or before work starts, and quote the estimate or contract number.

How do I show a partial payment on an invoice?

List the full job on the final invoice, then enter what has already been paid so the invoice shows the total, the amount paid and the balance due.

Should the final invoice show the full amount or just the balance?

Showing the full job with the deposit subtracted is clearer: the client sees everything they bought once, and the balance due is the only number left to pay.

Is VAT due on a deposit?

In the UK, HMRC says most deposits are advance payments that create a tax point when received, so VAT is due then. Refundable security deposits are treated differently. Check your own tax office's rules.

Sources

Make the deposit invoice now

Amount already paid and balance due built in, as a PDF in your browser. No sign-up.

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