Deposits, progress payments and final invoices

On a small team the money on a job comes in three pieces: a deposit that covers what you have to buy before you start, a progress payment tied to something the customer can see, and a final invoice that is the signed quote plus the change orders minus what has been paid. The structure is simple; the discipline is writing it on the quote, so the customer signs the schedule and not just the total.

Why split the money at all?

Because a small team carries the materials. On a gate operator install the operator, the conduit and the wire are bought before the first shovel goes in, and a customer who cancels on the morning of the job has cost me a day and a return trip to the supply house. The deposit is not a sign of distrust; it is the customer's share of the risk on a job that starts with me spending money.

The progress payment exists for the jobs long enough that the deposit has been spent before the end: the multi-day install, the access-control system across a building. And the final invoice exists so that the last conversation about money is about an invoice both sides already read.

What should the deposit be?

Enough to cover the materials and the lost day. Where I work, that is a percentage that varies with how much of the job is hardware: a service call has no deposit, an operator swap has a modest one, a full access-control install with readers and controllers has a larger one.

Two things to check before you set it:

• The rules where you work. A state can cap the deposit a contractor may take on residential work, and the cap is the cap regardless of what the job needs. Check your state before you write a percentage into your defaults.
• What it is for. Say it on the quote: "Deposit covers materials and scheduling." A deposit the customer understands is a deposit the customer pays.

In Combdex the deposit is instalment one of the quote's payment schedule, as an amount or a percentage, and it prints on the quote the customer signs. When the deposit arrives (bank transfer, cheque, or online through your own payment account), record it against the quote. Combdex bills the deposit as its own invoice, already paid, and raises a draft invoice for every other instalment. The drafts wait until their milestone.

What should a progress payment be tied to?

Something the customer can see, never a date.

A date is an argument: "You said the fifteenth and it is the seventeenth." A milestone is a fact: the trench is backfilled, the operator is mounted, the intercom stations are on the wall and calling the phones. When the milestone is visible, the customer pays without a conversation, because the conversation already happened when they looked at the gate.

My progress milestones on a gate job, when the job is long enough to need one:

1. Rough-in complete: trench, conduit, junction boxes, backfill. (This is also the day the trench photo is taken, before backfill, because the milestone and the evidence are the same moment.)
2. Operator mounted and powered.
3. Commissioning: limits set, safety devices tested, programming done. This one is the final invoice, not a progress payment.

On the quote each instalment carries its amount or percentage, its basis, and its milestone. In Combdex that is what the payment schedule is: instalments with a trigger (on acceptance, on a date or on a milestone), a state (scheduled, billed or cancelled) and, once billed, the invoice they were billed on.

What goes on the final invoice?

The signed quote, carried across. Not rewritten, not retyped, so the lines, the tax and the deposit arrive as they were signed. In Combdex a quote with no schedule converts whole: its lines, tax rate and discount are copied onto one invoice. A quote with a schedule becomes one invoice per instalment, each named as the quote printed it ("Deposit (30%)"), and the invoices add up to the quote's total and its tax to the cent (expiry, void and convert). The balance invoice is the final one. Before you publish it:

• Add the change orders, as lines, each described the way the original lines were ("Vehicle loop, saw-cut and sealed, furnished and installed"), each one something the customer agreed to in writing before it was done.
• Check the payments already made: the deposit invoice and the progress invoice, each paid, each traced to its line on the quote.
• Read the balance, which is the total less the payments, computed and not typed.

The customer reads what they signed, what changed and why, what they have paid, and what is left, and pays from the link. In Combdex the balance is derived again from the payment rows every time one changes, so the final invoice never has a number somebody typed wrong (recording payments and refunds).

What about the card cost?

If the customer pays by card, somebody pays the processing fee. A surcharge passes it on; it has to be disclosed before the customer pays, and whether a surcharge is lawful where you work is a question for your state, not for me. In Combdex the surcharge is a per-company setting, Pass credit-card fee to customer, card only, between 0 and 4 percent (the default is 3). The customer sees it on the payment button before they pay, and it prints on the receipt. Bank transfer through the same link carries no surcharge (online payment).

What happens when the money stops?

The invoice goes overdue on its due date, by itself, and the office sees the status on the dashboard. In Combdex reminders follow a ladder of 1, 7, 14 and 30 days past due, counted in your company's time zone and sent between 9:00 and 17:00 your time. They go only for invoices you actually sent, and never on an invoice that a refund reopened. The company can switch reminders off, and each invoice can pause them (sending and reminders). Every payment that did arrive is a permanent row with a date and a method, so if it goes to a collections letter or a lien, the history is a list rather than a memory.

What I do not do is edit the invoice to make the numbers agree. A payment recorded by mistake is cancelled, with a reason and a time, and the balance is derived again without it. A refund is its own record against the payment, never an edit to it. The invoice always explains itself, which is the only defence that works when a card issuer asks.

A structure to copy

For a job with a deposit only:

• Deposit, instalment one, a percentage, "covers materials and scheduling".
• Balance on completion.

For a job long enough to need a milestone:

• Deposit, instalment one.
• Progress, instalment two, tied to rough-in complete (with the photo).
• Balance on commissioning, the final invoice.

Every instalment on the quote, above the signature. Every change order in writing before the work. The final invoice carried across, not retyped. That is the whole system, and it fits on the back of a business card.

The invoices and payments app shows the conversion, the balance and the payment rows, and the invoice template shows the layout on paper. The quoting guide is the front half of the same discipline, and invoicing for contractors covers the tool.