Deposit

What is a deposit?

A deposit is money a client pays before you start work. It demonstrates their commitment to the project and gives you cash to cover initial expenses like materials. Deposits are standard practice for contractors—they protect you from doing work for clients who might not pay and help fund project costs before the final invoice.

How deposits work

A typical deposit arrangement:

• Deposit amount — Usually 25-50% of the project total
• When due — Before work begins, often upon signing the contract
• How applied — Subtracted from the final invoice
• Refundability — Terms should be clear about what happens if the project is cancelled

Why deposits matter

Deposits screen out clients who aren't serious, provide working capital for materials and early expenses, and reduce your risk on larger projects. A client unwilling to pay a reasonable deposit may be a warning sign about future payment issues.