<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=792695931297257&amp;ev=PageView&amp;noscript=1">

Get help with your accounts receivable. Chaser's experts are ready to assist

Speak with us now

When and how to ask for partial payments on invoices | Chaser

When and how to ask for partial payments on invoices | Chaser

According to a recent study from Barclays, 57% of SMEs are “currently waiting on money which is tied up in unpaid invoices,” which is likely fuelling worries relating to cash flow and prompt payment. One way this can be remedied is by requesting partial payments on invoices.

There are many reasons why you may explore this route - such as when the invoice is for a large sum of money or when the client is having financial difficulty.

In this article, we’ll discuss when and how to make a partial payment request. We will also provide tips on making the process easier for you and your clients.


What are partial payments

Partial payments are down payments made toward an invoice that is less than the total amount due. For example, you may request a partial paying invoice of 25% of the total cost upfront before carrying out any work.

Partial invoice payments can be a useful tool for businesses when they need a cash flow boost or during certain circumstances when a client is having financial difficulty and cannot pay the entire invoice at once.

However, asking for partial payments upfront can also be a delicate process, and it's important to consider both the needs of your business and your clients. This way, you are both on the same page regarding instalment payments.

When to request partial invoice payments 

There are several situations in which it might be appropriate to ask for a partial payment from your clients.

To help cover upfront costs

Partial payments can be requested to improve cash flow within your business. This is a common technique if your business spends a lot of money on customer contracts up-front. For example, construction companies often ask for up-front payments, especially if they order materials once a contract has been signed.  This way, they do not have to cover the cost of out of pocket expenses themselves.

In this scenario, your request for partial payment must be outlined in your payment terms ahead of time. This way, you can manage the client's expectations instead of sending an invoice before your goods or services have been delivered.


Partial payments should give your business the reassurance that your up-front costs will be covered, and can help you avoid cash flow problems so you keep your business running smoothly.

Click to tweet from the Chaser blog - button


To protect your business from bad payers

Another situation where requesting a partial payment is useful is when you are concerned that a customer may be unable to pay the invoice.

For example, this could be the case if you have run a credit check and are uncertain if this customer will make payment on time or if the customer is approaching or has supposed their credit limit and you are hesitant to extend additional credit.

In this case, requesting a partial payment ensures you receive some of the money up-front before you’ve invested any time and energy into this project. Charging a down payment beforehand means you can cover some of the costs for providing their goods or services while also reassuring your team that a potentially risky customer can make payments. After all, the last thing you want to do is work hard on a project only to receive no payment whatsoever.

Once you’ve coordinated a partial payment, you’ll also have the details for their accounts payable team on record. When you have these payment details on record, you know exactly who to contact to request a full payment once the job has been completed.

However, to ensure these details are collected and summarised, you should make it part of your credit control or accounts receivables policy or use this credit control and accounts receivables policy template.


CM-202207-8 Most Effective Email Templates - blog ad banner 1

To support your customers

Partial invoice payments can be used to support customers experiencing their own cash flow struggles. This is because a partial payment upfront can break the final invoice payment into smaller, more manageable payments that are easier to keep up with.

You can take a more flexible approach to payments by creating a payment plan for your clients. For example, you could set up a monthly payment plan where the total cost of the invoice is broken down into several different instalments, so they aren’t facing a large upfront sum. See when, how, and why to offer partial payments and payment plans to clients in this free guide. 


Important things to remember when requesting (or accepting) a partial payment from a customer.

There are a few things to keep in mind when requesting or accepting a partial payment or down payment from a customer:

  • Ensure the full invoice amount is detailed on the document, including applicable taxes and shipping charges. This will help avoid any confusion later on, as you ensure the client knows the remaining money they owe. You may also want to specify a minimum payment that must be covered in each corresponding invoice. 
  • If both parties agree to a partial payment plan, be sure to specify the due date for the remaining balance as part of the payment terms. You can send out a reminder for the final invoice after collecting partial payment.
  • Keep track of invoice payments received and make sure to apply them against the correct invoice. This will ensure your books are accurate and up-to-date, meaning you won’t lose track of payments. If you struggle with invoice tracking, try this invoice tracking template for google sheets and excel.

Using the above guidance, you can make the partial payments process smoother for your company (the service provider) and your clients. 


How much to charge upfront

One of the biggest challenges companies face when requesting early payment on an invoice is determining how much to charge. This is dependent upon several factors, including: 

  • The project scope 
  • Your business expenses and fixed-cost jobs
  • How long you expect it will take to complete the work or project

Below are some general guidelines to help you get started: 

  • If you’re working on a small project, consider charging 50% or less of the entire amount upfront as a partial payment deposit.
  • For larger or more complex projects, try charging anywhere from 25% to 75% of the entire amount as an initial deposit.

Again, these are just ballpark figures - you should tailor them to fit your specific situation. Beyond this, you may want to leave some room for negotiation with your clients, putting together a partial advance payments plan or schedule that benefits both parties.

As there’s no one-size-fits-all approach to partial payment plans, you should also take into account the payment behaviour of your clients. If you have a client who is generally prompt with payments, you may be able to invoice them for the entire project upfront with no complaints on their end. However, if you have a client who takes their time to pay invoices (the kind you send out frequent reminders to), expecting only a portion of the total invoice amount upfront is more realistic.

Moving forward, you should always get money in hand as soon as possible, even if it's not the full amount. This will improve cash flow, cover business expenses, and give you greater peace of mind.


How to request partial payments upfront


Select the amount you want paid upfront

The first step towards requesting partial payments upfront is deciding how much you want to collect in advance for specific invoices or particular customer groups (such as those you’ve chased for overdue invoices).

For partial payment for larger projects, it is reasonable to ask for 25-75% of the entire project amount upfront. For smaller jobs, you can send a partial payment invoice and collect a deposit before invoicing the rest of the money when the job is completed. This will help you avoid overdue invoices, ensuring you get the full payment on time.

Make a firm decision on your upfront payment amount before communicating this with the customer or presenting them with a partial payment invoice.


Communicating with clients 

If moving forward, you’re going to be requesting an upfront payment from both existing and new clients, you must change your payment terms and credit control policy to include the provisions for partial payment and then send these updated terms to your client. Ideally, they should know these terms before you send out a partial payment invoice.

This will help to manage your client’s expectations better, meaning they won’t feel offended or alarmed when a partial payment invoice lands in their inbox. Simply put, communicating with clients when implementing a plan to take a partial payment upfront is essential when it comes to maintaining a healthy relationship with them. As such, you should keep your client in the loop on what you’re expecting from them and why - and you must email them about upfront payments in a polite manner. You should use a similar courteous tone as you do in all communications, such as when you collect overdue invoices, while also working to ensure they understand the payment terms and what partial payment means for them.


Set deadlines and due dates

Setting clear deadlines and due dates for invoice payments ensures that both parties stay on track. As “54% of SMEs experience late payments”, having a precise due date written out can help avoid any late fees or penalties and also keep the business relationship running smoothly. You can also charge interest when you aren't paid on time.

Having deadlines and due dates in place can also help when it comes to negotiating early invoice partial payments.


Put the partial payment in escrow

Escrow is a service that holds funds until the terms of an agreement have been met. In the case of invoice payments, this would mean that the escrow service would hold the upfront payment until the full amount had been paid.

This can be helpful for both parties involved as it ensures that payment will be made, and it also gives peace of mind to the customer that they are paying for services that have been rendered.


Be prepared for common excuses and hesitations

Some customers may be reluctant to make a partial payment. This is because they do not want to seem like they’re not paying their fair share or that they’re not confident in the business’s ability to deliver on its promises.

There are a  few common excuses and hesitations that you might encounter when introducing a partial payments option to your clients: 

  • "We'll just pay the whole invoice when it's due."
  • "We're unsure if we'll have the funds available then."
  • "It's just not our policy to make partial payments."
  • "I'm sorry, but we don't have the budget for that right now."

Be prepared to counter these hesitations with solutions of your own.

If the customer says they will pay the invoice in full when it's due, suggest splitting the invoice into two payments and implementing a payment plan. This way, they are still paying in full, but they're also making their first payment sooner rather than later.

If the customer is unsure if they'll have the funds available at that time, suggest a deposit. A deposit is a partial payment of an invoice upfront with the remaining balance being paid later.

If the customer says it's not their policy to make partial payments, we suggest offering a payment plan. A payment plan is when you break the invoice total down into multiple payment amounts over a period of time. 

CM-202207-8 Most Effective Email Templates - blog ad banner 2

Why request partial payments for your invoices

There are many reasons you may want to send out an invoice partial payment, and there are many advantages and disadvantages, including:


  • Get paid sooner: Partial payments can help you get your money sooner, even if it's not the total amount. This is beneficial if you need cash to cover out of pocket expenses or are worried you won’t be paid on time.
  • Build rapport: Offering a partial payment option to customers when they are struggling with cash flow can help build a positive relationship with your client. 


  • Reputation: If communicated incorrectly, requesting a partial payment could make it look like your business is desperate for cash, harming your reputation. To avoid this,  communicate these changes and request payments in a polite, professional manner.
  • Relationship: It might impact your customer relationships if you come across as too aggressive or pushy when requesting a partial payment. But again, if you're polite in your communications and make it clear that you want to continue working with them, they will be more likely to comply.

Don't be afraid to ask for partial payment

Businesses must protect their cash flow, and requesting partial payments is an effective way to do this. While requesting payment upfront may be challenging initially, the benefits far outweigh any difficult conversations you have when introducing this policy.

Protect your cash flow and get invoices paid faster - implement partial payments and chase instalments automatically, with Chaser's accounts receivables automation software for free, for 14 days.

Subscribe to Chaser's monthly newsletter

Our monthly newsletter includes news and resources on accounts receivables management, along with free templates and product innovation updates.