Creating and Applying Deposit Invoices for Projects BETA

BETA: Project billing is currently in a closed beta. If you would like to be added to the beta group for this feature, please contact kemp.tucker@rev.io.

A deposit invoice is an invoice sent to a customer to collect payment before project work is complete. It is commonly used for project kickoff down payments, milestone-based partial billings, or to collect funds before ordering equipment. When you generate a deposit invoice, Rev.io creates a charge and an invoice that you can send to the customer like any other. When the final project invoice is generated, the deposit is automatically credited against it so the customer only owes the remaining balance.

When to Use a Deposit Invoice

Use a deposit invoice when:

A customer is paying a down payment at project kickoff.
You need to collect funds before ordering equipment or materials.
A contract calls for milestone-based partial payments before project completion.
You want to invoice a portion of a large project early to manage cash flow.

Do not use a deposit invoice for:

Recurring services. Use standard recurring billing instead.
One-time charges for work that is already complete. Use a standard invoice instead.
Ongoing managed services billed on a regular cadence.

Creating a Deposit Product

Rev.io invoices are built from products. Every line on every invoice, including a deposit invoice, must reference a product in your catalog. Because every business handles deposits differently, Rev.io does not include a default deposit product. You will need to set one up in your product catalog before you can use the Create Deposit Invoice feature.

The Deposit product acts as a reusable template. You set it up once and use it for every deposit invoice across every project going forward.

NOTE: If your business uses multiple types of deposits (for example, project deposits vs. equipment prepayments) and you want them to appear as separate lines in financial reporting, set up a separate product for each type.

To set up your Deposit product:

Navigate to Product Catalog in the main menu.
Click Create New Product.
Enter a product name. We recommend "Deposit," "Project Deposit," or whatever term your accounting team uses on the GL side.
Set the product type to a one-time, non-recurring product type.
Map the product to the correct GL account. Deposits typically map to a Customer Deposits liability account, not a revenue account. Work with your accountant or controller to confirm the right account.
Configure the product's tax behavior based on your jurisdiction. Tax treatment for deposits varies by state and by what the deposit is being applied to. Consult your tax advisor if you are unsure.
Click Save.

Creating a Deposit Invoice

Once your Deposit product is set up, you can create a deposit invoice on any project.

Navigate to the project you want to bill a deposit against.
Click Create Deposit Invoice.
Select your Deposit product from the catalog.
Enter the deposit amount.
Review the invoice details, including billing date, due date, customer, and tax if applicable.
Generate the invoice.

The invoice will be sent to the customer following your standard invoice delivery settings. The customer pays the deposit invoice the same way they would pay any other invoice.

Applying the Deposit to the Final Invoice

When you generate the final invoice for the project, Rev.io will automatically bill the customer for the full project amount, credit back any deposit invoices generated against the project, and calculate the net amount due. You do not need to manually enter the credit, calculate the offset, or remember to apply the deposit.

Example

A $10,000 project with a $2,000 deposit collected at kickoff:

	Amount	Customer Pays
Deposit invoice (sent at project kickoff)	$2,000	$2,000
Project work (parts + labor)	$10,000
Less: Deposit already invoiced	($2,000)
Net due on final invoice	$8,000	$8,000
Total paid by customer		$10,000

IMPORTANT: For the deposit credit to appear correctly on the final invoice, all parts, labor, and other charges must be fully recorded on the project before you generate the final invoice. The deposit credit is applied at the point of final invoice generation. If you generate the final invoice before all charges are recorded, the credit will still apply, but any unbilled work will need to be invoiced separately and the deposit cannot be re-applied to a follow-up invoice.

Before generating a final invoice, confirm:

All labor hours have been logged and approved.
All parts and equipment have been recorded against the project.
All third-party costs such as subcontractors and expenses have been entered.
Any change orders have been approved and added.

Frequently Asked Questions

Can I issue multiple deposit invoices on the same project? Yes. You can issue as many deposit invoices as needed over the life of the project. All of them will be credited against the final invoice.
What happens if a project is cancelled after a deposit has been paid? The deposit funds are held as a liability until the final invoice is generated or until you process a refund. Your accounting team can guide you on the correct refund process for your business.
What if the deposit total exceeds the final project amount? The final invoice will show a credit balance. You can apply the credit to a future invoice for the same customer or process a refund, depending on your customer's preference and your internal policies.
How is tax handled on deposit invoices? Tax is calculated on the deposit invoice based on the tax settings of your Deposit product and the project's tax jurisdiction. Tax treatment varies by state and by the type of work the deposit is being applied to. Consult your tax advisor or accountant to confirm the correct setup for your business.
Can I edit a deposit invoice after it has been generated? A generated invoice generally should not be edited after it has been sent to the customer. If you need to correct a deposit invoice, follow your standard process for voiding or adjusting an invoice.
What is the difference between a deposit invoice and a regular invoice? A regular invoice bills for work that has already been completed and recognizes that amount as revenue when paid. A deposit invoice bills for work that has not yet been completed. The funds are held as a customer deposit (liability) until the project is finalized and the deposit is applied to the final invoice.