Deposits and milestone invoicing for agency projects

Agree the schedule before creating invoices

For proposals, contract terms and manually prepared phase invoices, see the web design studio workflow. Creative approvals and file delivery remain separate.

Start with a defined project scope and total agreed amount. List the billing events in order, with a description of what triggers each one. A deposit before work starts, a design-stage invoice and a final handover invoice are separate events, even if they share a client and project.

Confirm whether the schedule depends on dates, delivery or approval, and who confirms that a trigger has been met. Do not substitute an invoice issue date for evidence of a completed milestone. Questions about contractual, refund or tax treatment need appropriate advice; this guide covers the operational reconciliation.

For the timing choice across projects, hourly work and retainers, compare invoicing in advance and in arrears.

Make the arithmetic add up once

Check that milestone percentages total 100 percent and that their currency amounts total the agreed price. Calculate each amount using the same project total, then review any rounding difference before issuing invoices. Avoid recalculating later stages from a remaining balance unless that is explicitly how the schedule was agreed.

Maintain a simple external schedule showing stage name, agreed amount, trigger, invoice reference and receipt status. This is a planning worksheet, not a claim that ABH has native payment schedules. It gives the agency a view across separate invoices without changing their individual balances.

Worked example: a three-stage website project

Illustrative fictional example, USD, excluding taxes: a website project totals $8,000. The parties agree 30 percent before work starts, 40 percent at the defined design milestone and 30 percent at the defined final milestone. The amounts are $8,000 multiplied by 0.30, or $2,400; multiplied by 0.40, or $3,200; and multiplied by 0.30, or $2,400.

Create three separate invoice records as their agreed triggers occur. The first requests $2,400. The client pays $2,400 through the agency's external bank arrangement. After verifying the receipt and invoice reference, the Owner manually records that payment against the first invoice. Its outstanding balance becomes $0.00.

The second invoice requests $3,200, and the third requests $2,400. Their combined amount is $5,600; adding the first invoice gives the agreed $8,000. Do not also issue a new $8,000 invoice on top of these three. The first $2,400 was already invoiced and received, so subtracting it again from the $3,200 second stage would also misstate the agreed schedule.

Distinguish an invoice from a received deposit

A draft or shared deposit invoice requests money; it is not evidence that money arrived. Check your external bank or payment records before marking the amount as received. Match currency, amount, reference and receipt date, especially when the client has several projects with your agency.

ABH records payments manually in an append-only ledger using fixed-precision amounts. It does not initiate a bank transfer, process cards or hold client funds. Review the entry carefully before recording it, and do not imply that creating an invoice can confirm settlement through the client's external provider.

Review each milestone before issuing the next invoice

Check that the agreed trigger has occurred and that the stage description matches the work delivered. Ask the project lead to resolve missing acceptance information outside the invoicing action. ABH does not automatically release a milestone or determine whether a client has accepted a deliverable.

Look at earlier invoices and receipts before creating the next draft. A partially paid earlier invoice remains a separate balance; do not hide it inside a new milestone amount without a clear reconciliation. The payment terms guide helps explain due dates, references and billing contacts on each stage invoice.

Handle changed scope with a revised reconciliation

When the client agrees additional work, document the change and decide how it affects the remaining billing schedule. Keep the original project amount and the agreed addition visible. A larger final invoice needs an explanation tied to the change, not a silent alteration of the original percentages.

Use the scope change billing procedure to capture external written agreement before delivery. Update the planning worksheet and check which invoices already exist. Do not cancel, duplicate or overwrite a previous charge merely to make the project look like one clean new number.

Choose the right tools for planning and collection

The service invoice template helps organize line descriptions, dates and totals. Review the PDF before sharing a public invoice link, including any instructions you provide for the external payment method. Confirm recipient details through your agency's normal process rather than relying on an unexpected message changing bank instructions.

Read the integration boundaries before planning a workflow around accounting sync or in-product client collection. Keep the external receipt reconciliation in your process. Invoice status, project progress and receipt status describe different things and should not be treated as interchangeable evidence.

Keep the project view and invoice view consistent

At each stage, compare three separate figures: the agreed project amount, the amount invoiced so far and confirmed receipts. These totals can legitimately differ while delivery is underway. In the website example, after issuing the first two invoices, $5,600 has been invoiced against an $8,000 project. If only the first $2,400 has been received, the outstanding amount on issued invoices is $3,200 and a further $2,400 remains scheduled for the final trigger. Do not call the whole remaining $5,600 overdue merely because it has not arrived. The final stage may not yet be invoiceable, and an issued invoice may still be within its agreed due date.

To match milestones with client authorization, use the purchase order invoicing guide.

Deposit and milestone checklist

• Confirm the total price, scope, currency and billing triggers.
• Check that percentages and stage amounts add up to the agreed total.
• Keep an external schedule with stage, invoice and receipt references.
• Verify each trigger and previous billing before creating a new invoice.
• Record only confirmed external receipts against the correct invoice.
• Reconcile changes, outstanding balances and the final project total without duplicate charges.