Deposits and progress payments: stop being your customer's bank

By the SKEDS Team · 21 October 2026 · 6 min read

Picture the cash timeline of a four-week renovation billed the traditional way: you pay for materials in week one, wages in weeks one through four, the subbie's invoice in week three — and you invoice the customer at the end, on 14-day terms they stretch to thirty. For nearly two months, your business has financed their project. Multiply by three concurrent jobs and you've discovered why profitable trade businesses still run out of cash: the work makes money on paper while the timing bleeds it in the bank.

Deposits and progress payments are how established trades fix the timing. They're normal, customers expect them on bigger work, and the only businesses that don't use them are the ones who never got around to setting them up.

When a deposit is appropriate (almost always, above a threshold)

A deposit does three jobs: it funds materials so you're not fronting them, it confirms the customer is genuine before you commit calendar space, and it dramatically reduces cancellations and no-shows on booked work. Sensible norms: for small jobs, none needed; from a few thousand dollars up, 20–30% or "materials plus a margin"; for custom-ordered or non-returnable materials, at minimum their full cost. First-time customers and historically slow payers warrant deposits at lower thresholds — your debtor history per customer tells you exactly who.

The deposit request should ride on the quote acceptance: "To confirm your booking for the week of the 14th, a deposit of $X secures materials and your slot." In SKEDS the accepted quote becomes the scheduled job and the deposit invoice in the same motion — with a pay-now option, because a deposit that's easy to pay gets paid same-day.

Structuring progress payments that customers accept

Progress payments work when they're tied to visible milestones, agreed before work starts. Vague mid-job invoices feel like a shakedown; staged claims against things the customer can see feel like fairness. A pattern that works for most multi-week jobs:

• Deposit (20–30%) on acceptance — materials and booking.
• Stage claims at named milestones — demolition complete, rough-in done and inspected, lining and waterproofing finished, and so on for the trade in question.
• Final (10–15%) on completion and walkthrough — small enough that withholding it isn't leverage, large enough to matter.

Put the schedule in the quote itself. Customers planning finance genuinely appreciate knowing the payment rhythm; banks funding renovations often require it. And when variations get added mid-job, each one attaches to the next stage claim rather than ambushing the final invoice.

Milestones need evidence

A progress claim lands softly when it arrives with proof. "Stage 2 complete — rough-in finished and inspected" plus photos from the job record makes payment a formality; a bare invoice for "progress" invites questions and delay. This is where the job-record habit compounds: the photos your crew took at each stage for quality and compliance double as the paperwork that gets each claim paid. For work under formal construction contracts, dated stage records also underpin your rights under the relevant construction-payments legislation in your country — check the specifics that apply locally, and put your payment terms in writing every time.

Running staged billing without an admin burden

The reason small trades avoid progress billing is admin: three invoices per job instead of one sounds like triple the paperwork. In practice, with the job carrying its own payment schedule, each stage claim is generated from the job — scope, stage amount, approved variations to date — and synced automatically to [Xero](https://www.xero.com/), [MYOB](https://www.myob.com/) or QuickBooks. The books always show what's been claimed, what's outstanding and what's still to come, per job. What used to be a spreadsheet of dread becomes a status column.

What staged payments do to your risk

The deepest benefit is risk-shaped: staged payments cap your maximum exposure to any single customer at one stage's worth of work. If something goes wrong — the customer's finance collapses, a dispute erupts, they simply stop paying — you find out at the next milestone, not at the end with the whole job unpaid. Combined with the overdue-invoice ladder (a stage claim overdue pauses the next stage's work — say so in your terms), you've converted the worst-case scenario from "the whole renovation" to "two weeks' work", and the cash-flow curve of the whole business flattens accordingly.

Frequently asked questions

Will asking for a deposit scare customers off? Serious customers, no — it signals an established business. The enquiries a deposit deters are disproportionately the ones that would have cancelled, haggled or paid late anyway.

Are there legal limits on deposits? Rules vary by country and by contract type, and some jurisdictions cap deposits on certain residential building work. State your deposit and payment schedule in your written terms, and check the rules that apply to your trade and region.

What if a customer won't pay a stage claim? Your terms should tie continuation to payment: work pauses until the claim clears. Firm, fair, and stated upfront — which is why it goes in the quote, not in an argument.