Deposits and progress billing

Last lesson's job spent six weeks underwater because of one silent assumption: that you get paid once, at the end. That assumption is not a law of nature. It's a term — and terms are yours to write.

Move the payments, not the price

Same job: $1,250 price, $1,000 of costs. Split the invoice into a 30 / 40 / 30 schedule:

• 30% deposit — $375 before work starts
• 40% at rough-in — $500 when the visible milestone lands
• 30% at completion — $375, due on receipt

Follow the teal curve: the deposit puts you at +$375 before the first dollar leaves. Materials pull you to a shallow −$25, the rough-in payment lifts you back up, and the deepest the job ever gets is about −$125 — versus −$1,000 on the dashed curve. Same price, same cost, same $250 profit. The only thing that changed is WHEN, and WHEN was the whole problem.

Why each piece earns its place

• The deposit covers materials before you front them, and it screens clients: someone unwilling to commit 30% is telling you something about week 8.
• The milestone payment ties money to visible progress — easy to justify, easy to invoice the day it happens.
• The completion payment stays small enough that even a slow final check can't sink the job — you're arguing over your profit, not your costs.

Percentages flex by trade and law: materials-heavy work leans harder on the deposit; several U.S. states cap deposit sizes on home-improvement contracts (check yours). The design rule stays fixed: schedule payments so the cash curve never dips below what you can carry.

Terms are part of the estimate

A price without payment terms is half an estimate. The Estimate & Invoice Studio carries a deposit line for exactly this reason — the schedule belongs ON the document the client signs, not in a hopeful conversation after the work is done.

One curve is still unguarded: that final payment arriving on time. That's receivables — the next lesson.