Create an installment invoice: deposit and final payment

A large project often requires materials and labour before you get paid yourself. By creating an installment invoice, you split the amount across logical moments: when the job is confirmed, when work starts and after completion. Your customer knows what to expect in advance, and you do not have to finance everything upfront.

An installment invoice is not a complicated document. Each installment becomes its own invoice, with its own invoice number and due date. What you mainly need is a clear agreement on the total amount, the invoicing moments and what is paid in each installment.

When should you invoice in installments?

Installment invoicing works well for projects that take longer, involve a high proportion of materials or have clear phases. Think of a veranda, an installation, a renovation or a fitting job. Rather than asking for the full amount only after the work is finished, you link payment to the progress of the project.

A common split is:

• a deposit when the customer accepts the quote;
• an installment invoice when work starts or when you order materials;
• a final invoice after completion.

You decide which split to use. Make sure you set it out clearly in your quote beforehand. That way, a deposit does not come as a surprise and you avoid discussions when the first invoice arrives. Want to make sure the project is clearly recorded first? A professional quote lets you break down the work and pricing rules clearly.

How can you create an installment invoice?

Start with the total amount in the accepted quote. Then divide that amount across the moments when you want to invoice. Give each installment a clear description, so the customer understands what the invoice is for.

Work through it step by step:

1. Set the total amount for the project. Use the amount agreed with the customer, including the correct VAT for each line.
2. Choose the invoice dates. For example, when the job is confirmed, when work begins and after completion.
3. Divide the amount across the installments. Make sure all installments add up to the agreed total.
4. Create a separate invoice for each installment. Every invoice gets its own number, description and due date.
5. Check the final installment. The final invoice must contain exactly the remaining amount, even if earlier installments have been adjusted.

You can therefore divide one project into several invoices, each with its own date and description. That keeps your records clearer than one large invoice followed by separate payments later on.

Use descriptions your customer understands immediately. For example: ‘Deposit after order confirmation’, ‘Installment at start of installation’ and ‘Final invoice after completion’. Avoid vague descriptions such as ‘part 1’ if it is not clear what that installment relates to.

What do a deposit, start installment and final invoice look like?

Suppose you install a patio cover for a customer. The agreed price is €12,000 excluding VAT. You agree that the customer will pay in three parts: 30% when the job is confirmed, 50% when installation starts and 20% after completion.

You would then create these three invoices:

• Deposit: €3,600 excluding VAT, described as ‘Deposit for patio cover after order confirmation’.
• Start installment: €6,000 excluding VAT, described as ‘Installment invoice at the start of patio cover installation’.
• Final invoice: €2,400 excluding VAT, described as ‘Final invoice after patio cover completion’.

The customer does not receive the same invoice three times, but three separate invoices that together cover the full project. Each installment has its own due date. This gives you a logical moment to check whether payment has arrived before moving on to the next phase.

Is the project based on an accepted quote? You can carry the line items and customer details over to a draft invoice. There is no need to enter them again. See how to turn a quote into an invoice or work order, so what you sold stays the same in delivery and invoicing.

How do you record a partial payment on an invoice?

An invoice in installments is different from a partial payment on a single invoice. With installment invoices, you create several invoices in advance. With a partial payment, the customer pays only part of one existing invoice.

For example, you send an installment invoice for €6,000 and the customer pays €2,000 in advance. Record that payment against that invoice. The outstanding amount is then €4,000. The invoice is only fully paid once the remaining balance has also been received.

This distinction matters for your overview. If you only note that a customer has ‘paid something’, you will not know later how much is still outstanding. By linking the payment to the right invoice, you can see immediately what still needs to come in.

Do not simply create a new invoice for the remaining amount while the original invoice is still open. That could lead to invoicing the same work twice or make things unclear for the customer. Keep the partial payment on the existing invoice and use the outstanding balance as your guide.

Why should reminders use the outstanding amount?

A payment reminder should reflect what the customer actually still has to pay. After a partial payment, that is not the original invoice total, but the remaining amount.

This prevents an unnecessarily harsh or confusing reminder. If your customer has already paid part of the invoice, you do not want to write as though nothing has been received. A good reminder states the outstanding amount and gives the customer an easy way to pay the remaining balance.

In Klantly, installment invoices can be created as separate invoices and you can record partial payments against an invoice. Reminders then use the outstanding amount, not the full invoice total. With invoices and payment reminders, you can keep track of the status of each installment and what still needs to be paid.

Always check that a payment has been processed correctly before sending a reminder. A payment that has not yet been linked to the right invoice may otherwise incorrectly appear as outstanding. For a practical approach to follow-up, you can also read about setting up automatic payment reminders.

A clear installment schedule will not stop someone from paying late, but it does make clear what is expected and when. And when you keep invoices, payments and outstanding amounts up to date, you no longer have to guess which balance you still need to chase.

Want to see how Klantly can help with quotes, installment invoices and payment tracking? Start for free