Deposits and Progress Billing: How to Fund Bigger Jobs

Big jobs are good for revenue and dangerous for cash flow. If you buy materials and pay your crew for weeks before seeing a dime, one slow-paying customer can put you underwater. Deposits and progress billing fix that.

Should you take a deposit before starting a big job?

Yes, at contract signing, and it does two jobs: it funds the materials and early labor, and it confirms the customer is serious. For material-heavy trades like roofing or construction, starting a large job with no money down is a real risk. A deposit is standard and expected — the FTC's home-improvement guidance tells homeowners that some states cap how much a contractor can ask for up front, so check your state's limit before you set the percentage.

Consider a $12,000 roof replacement. The shingles, underlayment, and disposal might be a large share of that cost, all paid out before the first nail goes in. Starting that job with zero money down means floating thousands of your own dollars on the bet that the customer pays on time at the end — and if they stall, you've covered their materials out of pocket. A deposit at signing turns that bet into a funded job, and the customer who happily puts money down is also the customer who's genuinely committed rather than shopping around.

How should you bill a big job as it progresses?

In milestones — deposit, mid-project, completion — rather than one invoice at the end. Each milestone triggers an invoice as that stage finishes, so your incoming cash tracks the work you've already done and paid for.

On that same roof job, a sensible structure might be a deposit at signing to cover materials, a progress payment once the tear-off and decking repair are done, and the balance at final inspection. Each stage bills as it completes, so your incoming cash moves in step with the costs you've already absorbed — instead of carrying the entire job on your own books until a single end-of-project invoice clears.

Why tie progress payments to clear milestones?

"50% on completion of framing inspection" can't be argued with; "halfway through" can. Define each stage in the contract so there's no ambiguity about when a payment is due — clear milestones prevent disputes and make staged invoices feel fair rather than arbitrary.

Vague stages invite arguments; specific ones don't — either the inspection passed or it didn't. Spelling each trigger out in the contract up front means a progress invoice never feels like you're asking for money early; it reads as the agreed term both sides already signed, which keeps the relationship smooth even on a long, expensive job.

How do you make staged invoices easy to pay?

Online, with card and ACH on every milestone invoice and reminders already attached. Staged billing only helps cash flow if each invoice gets paid quickly — a progress payment that sits unpaid while the next stage piles up costs defeats the purpose.

The whole point of staging is undone if a milestone invoice sits unpaid while your crew has already started the next phase. Sending each one online with a "Pay now" button and offering ACH for the larger balances keeps payments moving, and automatic reminders mean a mid-project invoice doesn't quietly age out while you're focused on the work itself.

How do you keep track of all the payments on one job?

One job record, every payment against it: the deposit, each progress payment, and the final balance, so what's collected and what's outstanding is always one glance away.

With three or more payments tied to one job, it's easy to lose track of who owes what — especially across several active jobs at once. Keeping the deposit, every progress payment, and the remaining balance on a single job record means you can glance at any project and see exactly what's been collected and what's still outstanding, without reconstructing it from a pile of separate invoices.

What does deposit-plus-progress billing look like in practice?

Take a $20,000 kitchen remodel: three payments, one record.

1. A deposit at signing, sized to cover cabinets and early labor.
2. A progress payment when rough-in (plumbing and electrical) passes inspection.
3. The balance at the final walkthrough.

At signing you collect a deposit to cover cabinets and early labor and to confirm the customer is committed. The contract spells out two further triggers: a progress payment when rough-in (plumbing and electrical) passes inspection, and the balance on final walkthrough. As each milestone hits, you send that invoice online with card and ACH options and let the automatic reminders handle follow-up, so no stage payment lingers while the next phase runs up costs. If the scope moves mid-job, price the extra as a change order first (see how to price and document a change order so it gets paid) so the next draw already includes it. Every one of those payments posts against the one remodel record, so at any moment you can see the deposit in, the rough-in payment in, and the balance still due. The result is that a large, multi-week job never forces you to bankroll the customer — your cash comes in step with the work, and nothing about the schedule of payments is a surprise to either side.

Tabsy supports deposits, milestone-based progress billing, and online payments tied to each job — see how it works for roofing contractors and general contractors, or view pricing.