A partial payment invoice allows for an owed balance to be paid in increments. The invoice includes all typical features seen on a standard invoice but also includes information regarding previous payments and future dues (if any).
Who Uses a Partial Payment Invoice?
An example of a use for a partial payment invoice is in contracting, where long projects are invoiced multiple times throughout construction until a final invoice is sent, which contains the previous balances paid and the final balance due. Another use would be an advertising campaign that extends over several months. On a monthly basis, the advertiser would invoice the client for a portion of the total agreed-upon advertising campaign. Essentially, a partial payment invoice is useful for any service provider offering large or extended projects.
How to Use a Partial Payment Invoice
When using a partial payment invoice, it’s important that each invoice provides the recipient with the scope of the total amount due and their current progress with payments. This is crucial for two (2) reasons; 1) it makes the client have trust in the company issuing the bill, and 2), it aids in both organization and accounting on behalf of the issuer.
Using a partial payment invoice is very similar to that of a standard invoice. It will include the parties’ contact information, a list of the services rendered, the terms, and how the client can make a payment.
In many cases, businesses and freelancers allow for clients to make partial payments towards an owed invoice balance on a case-by-case basis. In some situations, clients may have the money on hand and ready to pay off the total bill, but choose to spread payments over several months to maintain a strict weekly or monthly budget. For recently established companies, allowing for partial payment is highly recommended to avoid unnecessary conflict and confusion with newly acquired customers.