How Much Deposit Should You Ask a Customer For?
You win a €10,000 order. Good news.
Then you discover that materials, suppliers and labour must be paid before the customer settles the final invoice.
The order may be profitable. But can your business finance the work until the money arrives?
The deposit you ask for should reflect the cash you need before the next customer payment, the cash you can safely contribute and the reserve you want to protect.
A percentage is the result of that calculation—not its starting point.
Start with the payments you must make
Before choosing a deposit, identify which expenses will actually leave your account before the next customer payment arrives.
Depending on the job, these could include:
Materials and supplier advances.
Subcontractor payments.
Wages payable during the work.
Delivery, equipment hire or installation costs.
Timing matters. A supplier invoice due after your customer pays creates a different funding need from one payable before work begins.
Also separate cash genuinely available for this order from money already committed to rent, taxes or other projects.
A €10,000 order: is a 30% deposit enough?
Consider this simplified example.
All figures exclude VAT. Taxes, financing costs and other business cash movements are excluded to isolate the order’s funding need.
Assumption | Amount or timing |
Total order value | €10,000 |
Materials paid before final collection | €3,500 |
Labour and subcontractors paid before final collection | €2,000 |
Total cash outflows before final collection | €5,500 |
Available business cash before the order | €4,000 |
Minimum cash reserve to preserve | €2,000 |
Customer deposit | Received before any order costs |
Remaining customer payment | Received after all listed costs |
With a 30% deposit, the customer pays €3,000 upfront.
Cash remaining immediately before the final payment would be:
€4,000 + €3,000 − €5,500 = €1,500
The business still has cash, but it has fallen €500 below its chosen reserve.
With a 35% deposit, the customer pays €3,500 upfront:
€4,000 + €3,500 − €5,500 = €2,000
Under these assumptions, 35% preserves the reserve exactly. It provides no additional room for unexpected costs.
This does not make 35% a universal recommendation. Change the costs, payment dates or available cash, and the answer changes.
Use a simple funding calculation
For a scenario with an upfront deposit followed by one final payment:
Required deposit = cash outflows before final collection + minimum reserve − available starting cash
In our example:
€5,500 + €2,000 − €4,000 = €3,500
Dividing €3,500 by the €10,000 order value gives 35%.
If the result is negative, this simplified scenario shows no deposit requirement for preserving the chosen reserve. That does not address cancellation or non-payment risk.
If the required deposit exceeds the order value, the proposed payment structure cannot solve the funding problem on its own.
For multiple customer payments or overlapping orders, map receipts and expenses by date. The lowest cash balance during the work matters more than the closing balance.
What if the customer will not accept that deposit?
Revisit the payment structure.
An intermediate payment before an expensive project stage could reduce the initial deposit needed. A later supplier payment could also reduce the amount your business must finance upfront.
Any revised arrangement needs to be agreed. Run the calculation again using the proposed dates rather than assuming the funding gap has disappeared.
The practical question is:
Who finances the work between the first expense and the next customer payment?
Check what happens when payment arrives late
The example assumes no additional outflows while waiting for the final balance.
Real businesses continue paying bills.
If the customer pays later than expected, include the wages, overheads and other commitments falling due during that extra period. An order that preserves your reserve under the original schedule may breach it under a delayed-payment scenario.
A useful check is to compare the expected payment date with a later collection date and identify the lowest cash balance in each case.
Bring this thinking into your next business decision
Before accepting an order, write down its value, payment schedule, early cash costs and the reserve you want to preserve.
That is the practical cash-flow thinking behind PerCapita Cash Flow Control: bringing business cash into the centre of your next decision.
Explore the tool with a real order in mind:
A sale creates an opportunity. Its payment terms determine how much cash you need to deliver it.
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