Deposits and Progress Payments for Tradies

Set deposit and milestone structures that protect materials and labor costs.

Trade specific context: deposit strategy for trades

Deposits and progress payments reduce risk by matching cash inflow to cost exposure. For trade businesses, this is often the single biggest control on bad debt.

USA vs Australia terminology

Using familiar local wording in quotes, invoices, and reminders reduces confusion and helps approvals move faster.

Recommended billing model

Model: deposit plus milestones

1. Agree on payment terms and approval steps before work starts.
2. Invoice immediately when each billable stage is complete.
3. Schedule reminders before the due date and on the due date automatically.
4. Escalate overdue accounts on a clear, fixed schedule.

Common blocker and fix

Frequent blocker: client resists upfront payment

Fix: Attach the right proof and references when you send the invoice, then confirm receipt with the approver the same day.

Example: Materials are covered by deposit before procurement, then labor-heavy stages are billed as milestones.

Common questions for deposit strategy for trades

How much deposit should tradies request?
Set deposit by material exposure and booking commitment.

Do progress payments reduce bad debt?
Yes. Smaller balances remain at each stage so risk is lower.

How should milestones be defined?
Tie each milestone to clear deliverables and signoff criteria.

Metrics to review weekly

• Overdue value by aging bucket.
• Average days to payment by client type.
• Reminder response rate and promise to pay completion.
• Dispute volume and resolution lead time.

Note: Regulatory requirements differ by state and country. Use local legal and accounting advice for contract and statutory compliance.

Want to automate follow-ups and get paid faster?

Invoice Chase helps trade businesses send consistent reminders with less admin overhead.