How to invoice a client who pays in instalments

Your client has paid the first £500 of a £1,500 project, but the next payment is not due for another month. You have work to deliver now, an invoice to issue, and three different questions to keep separate: what has been paid, what remains due, and when the client gets the next part of the work. A clear instalment invoice answers all three.

Decide what the invoice represents

There are two common arrangements. In the first, you invoice the full project price and record each instalment against that invoice. In the second, you issue a separate invoice for each stage or scheduled payment. Both can work. The important part is that the document makes the total contract value and the current amount due visible at the same time.

1. 1Use one invoice for the whole project when the client has agreed a fixed price and you want one outstanding balance to track.
2. 2Use separate invoices when each instalment corresponds to a distinct deliverable, such as a discovery phase, a draft and a final handover.
3. 3Do not label a payment simply as “part payment”. Name the stage or period it covers, such as “Deposit”, “Milestone two: course outline” or “Final balance”.
4. 4Give the client one invoice number and a separate instalment reference if you are working from a single invoice.

Put the numbers in a form you can reconcile

A client should be able to read the invoice and calculate the balance without opening a spreadsheet. You should be able to compare it with your payment account using the invoice number, payment date and amount. If you sell digital work directly, store.fan’s payments tools can keep the transaction tied to your storefront and send money straight to your own Stripe account. Stripe’s own processing fee still applies, while store.fan takes 0% of sales.

If you are issuing a new invoice for instalment two, show “Total project value: £1,500” as context, then show “This invoice: £500” and “Balance after payment: £500”. If instalment two has already been paid, mark it as paid rather than showing it as a new amount due. That distinction prevents the same money being counted twice.

Set dates and delivery conditions

List the invoice date, payment due date and the date or trigger for each later instalment. A schedule might say: 30% on acceptance, 40% on delivery of the first draft, and 30% before final files are released. Avoid relying on phrases such as “when the work is nearly finished”. A date or measurable event is easier for both sides to recognise.

• Name the payment method and the account or checkout the client should use.
• Include the invoice number in the payment reference.
• State whether the work starts after the first payment clears.
• State whether later work pauses if an instalment becomes overdue.
• Explain what happens if feedback or approvals arrive late and shift the delivery date.
• Keep the signed proposal or contract alongside the invoice, since the invoice should reflect the agreement rather than replace it.

Handle tax without hiding it in the total

Show the tax treatment for each invoice, not just the final amount the client must transfer. If you are VAT-registered, show the net amount, VAT rate, VAT amount and gross amount where required. If your prices are VAT-inclusive, label them as such and show the calculation your records need. If you are not charging VAT, do not add a VAT line merely because the client asks for one.

Instalments do not automatically mean you can postpone every tax obligation until the final payment. The relevant tax point can depend on the supply, invoice and payment terms. Digital products can also be affected by where the customer lives; this guide to VAT on digital products explains why location matters. Keep copies of the invoice, payment confirmation, refund and any credit note so the trail remains complete.

Choose a workflow you will actually maintain

For a small number of bespoke clients, a numbered invoice template and a simple receivables list may be enough. Record five fields: client, invoice number, instalment, due date and status. Use statuses such as scheduled, sent, paid, overdue and refunded. Check the list on the same day each week so a missed payment does not depend on your memory.

For products, courses or coaching sold repeatedly, a storefront can reduce manual matching at checkout. On store.fan, your storefront lives at store.fan/username, and payments can go directly to your own Stripe account. If you sell a course or coaching package, describe each included stage on the product page and use the checkout record as the starting point for your payment log. The iOS app can also provide instant sale alerts, although an alert is not a substitute for a proper invoice or tax record.