How do Deposits work?
FreshBooks has the ability for you to easily request a percentage of your Invoice to be paid upfront as a Deposit. This feature is separate from our Partial Payments feature, which allows your Clients to choose the amount they pay online. With Deposits, you specify the amount to be paid.
How it works
When creating a new Invoice (on the web-based version of FreshBooks), you will notice a Deposit option directly below the Invoice total.
Once you click on the Request a Deposit link in blue, you’ll be able to enter the percentage of your Invoice you would like paid upfront.
You can then send your Client the Invoice with the status Deposit Due. This is what your Client will see when they open the Invoice:
If you have made online payment available, your Client can also click on Pay Deposit Online and pay the fixed amount set for the Deposit. Once paid, the Invoice’s status will change to Deposit Paid and your Client can begin making payment against the remaining balance. If your Client paid outside of FreshBooks, you can change the status by manually entering a payment.
This is what it will look like on your side when the Deposit is paid:
Do late payment reminders work on Invoices with Deposits?
Yes they do! Invoices with a Deposit will still trigger the late payment reminder emails on whichever schedule you’ve set up. Note that the reminder will go out based on the Date of Issue on the Invoice, regardless of when the Deposit was entered.
Can I make multiple Deposits per Invoice?
Currently you can only have one Deposit set per Invoice. After this you can use our Partial Online Payments feature so that your Client can pay the rest of the Invoice in multiple payments online. You can always also add any offline payments manually to apply further payments.
How do Deposits factor into my Reports?
Deposits in FreshBooks are considered liabilities until further payment has been added on the Invoice. As they are not initially considered revenue, they will not show up in these Reports: Revenue By Client and Profit and Loss (Billed method) until further payment has been entered on the Invoice beyond the Deposit. Deposit Invoices will immediately show up on these Reports: Payments Collected (when Deposit payment is received), Tax Summary, and Accounts Aging.
How is tax factored into Deposits?
When you set a Deposit, the percentage that is set is calculated based on the Invoice total before tax. So if you had a $113 Invoice (with $13 being tax) and asked for a 50% Deposit, the Deposit would set to $50.
If I also allow my Clients to make Partial Payments, will they be able to pay just a portion of the Deposit?
If a Client is paying online, they will be required to pay the full Deposit amount. Once the Deposit has been paid though, the Client can make partial payments against the remaining Invoice balance.
Can I set a Deposit amount on the mobile app?
At this time, you can only set Deposits on the web-based version of FreshBooks.