Getting paid
How to bill a job in stages: deposit, progress and final invoices
Updated · 6 min read
The short answer
Agree a payment schedule in writing before the work starts. Take a deposit within any limit your state sets, send a progress invoice as each stage is finished, and send a final invoice that shows the job total, every approved change and every payment, so the balance is clear.
1. Agree the schedule in writing first
Put the price and how it will be paid in the written agreement or estimate your client signs. The FTC tells homeowners to ask for a written agreement even when their state does not require one [1].
List each stage, what finishes it, and how much is due. For example: deposit, rough-in done, final inspection passed.
2. Set a fair deposit
A deposit pays for materials and holds your place in the schedule. Keep it within the rules where you work: some states limit how much a contractor can ask for as a down payment [1]. Check your state licensing board before you set yours.
Homeowners are told not to pay the full amount up front [1], so a deposit that covers only the first costs is easier to say yes to.
3. Send a progress invoice at each stage
When a stage is done, send an invoice for that stage only. Show the job total, what has been billed before and what is left, so your client can see where the job stands.
If the client approved extra work, add it as its own line. Changes waiting for approval should not be billed yet.
- Job total
- Billed before this invoice
- This stage
- Left to bill after this invoice
4. Make the final invoice add up
The final invoice should start from the agreed price, add each approved change, and take off every payment received. What is left is the balance due.
Clients are advised to make the final payment only when the work is done and they are happy with it [1]. A clear final invoice, sent when you finish, makes that moment easier.
5. Keep every document together
Keep the signed estimate, each change, each invoice and each payment record together. The IRS lists invoices among the documents that support your gross receipts [2].
Worked example: a $10,998.20 electrical job
| Estimate (signed) | $10,998.20 |
|---|---|
| Change 1 approved: 4 garage outlets | + $519.60 |
| Job total | $11,517.80 |
| Deposit paid | − $3,299.46 |
| Stage 1 paid (rough-in) | − $2,459.44 |
| Final invoice: balance due | $5,758.90 |
An invented sample. The numbers add up line by line, so the client can check every dollar.
Checklist
- The payment schedule is in the signed estimate
- The deposit is within your state's limit
- Each progress invoice shows billed before and left to bill
- Approved changes have their own lines
- The final invoice takes off every payment
- Every document is kept together
Questions
How big should a deposit be?
It depends on the job and on your state. Some states limit down payments for home improvement work, so check your state licensing board first.
Should a progress invoice include changes?
Only changes your client has already approved. Bill a change once it is signed.
What if the client pays part of an invoice?
Record the payment against that invoice. The next invoice should show the smaller balance.
Doing this for every job?
InvoiceWren keeps the estimate, approved changes and every payment for a job together, so each invoice adds up by itself.
See how billing in stages worksSources
- FTC Consumer Advice, How To Avoid a Home Improvement Scam. Checked .
- IRS, What kind of records should I keep. Checked .
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