Should I issue a separate invoice for the down payment?
I'm doing a website for a client, and I require them to make a down payment that is a percentage of the bill for the entire project. The remaining portion of the bill is due when the website is complete. This is agreed upon ahead of time in a proposal and contract.
My question is this: I get the down payment money at the beginning, and the rest of the money at the end. Should I issue two separate invoices? Or a single invoice at the end that has the down payment and final payment listed as separate items? What is best practice here?
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One thing you need to ask first is whether that money is yours to keep regardless of the outcome. If the down payment is a deposit against future labor then you can't record it as income. Could you clarify? – Chris 11 years ago
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Yep, initial payment cannot be refunded. – Pete 11 years ago
3 Answers
If you expect to get paid at the beginning and end of a project, send two invoices, one at the beginning and one at the end.
Generally you should have the first invoice have the total amount that the contract is worth in a section on an invoice, and then the amount that is actually due at that time. Then on the second invoice, you would have the total amount, show that a down payment was received (deposit), with the remaining amount. This way the invoices are obviously linked and they accurately display everything for you and your client.
