How do I invoice clients for split payments in the US?

Understanding split payments and why they matter

Split payments happen when a client pays a single invoice in more than one piece. In the United States, this is extremely common: a client might pay 50% upfront and 50% on completion, multiple departments might share a bill, an insurance reimbursement might cover part of the total, or a business might need to stagger payments around payroll cycles. As a business owner or freelancer, you want split payments to feel effortless—both for your client and for your bookkeeping.

When invoicing for split payments, your goals are simple: be crystal clear about what is owed, when it is owed, and how each payment will be tracked. The more predictable and transparent your invoice is, the faster you get paid, the fewer awkward follow-ups you send, and the easier it is to reconcile payments with your bank statements. Split payments also reduce friction for clients who want to commit but prefer to manage cash flow, and they can reduce your risk by securing a deposit before you begin work.

Invoice24 is designed to handle split payments in a way that feels professional and straightforward. You can create a single invoice, accept multiple partial payments, track the remaining balance automatically, and keep a clean record for both you and your client. The key is setting up your invoice so that a split payment looks like a normal, well-structured agreement rather than a confusing exception.

What “split payments” can mean in real life

Split payments isn’t one single pattern. In the US, you’ll see a few recurring scenarios, each of which needs a slightly different approach in how you describe the invoice and payment schedule.

Deposit + final balance: This is common for creative services, contractors, consultants, photographers, designers, and many home services. The client pays a percentage or fixed deposit to secure the booking, and the rest is due on delivery or completion.

Milestone payments: The invoice is paid in stages tied to deliverables. For example: 30% at kickoff, 40% after the first draft, 30% on final delivery.

Multiple payers: Two or more parties are responsible for different portions. This is common when a client and a partner are sharing costs, a business has multiple cost centers, or a parent company and subsidiary are splitting an expense.

Partial payments over time: A client wants to pay in installments—weekly, biweekly, or monthly—until the invoice is fully paid. This can resemble a simple payment plan without the complexity of financing.

Mixed methods: A client pays some by card and some by ACH, or they pay part via check and part via bank transfer. You still want it all tied to the same invoice record.

Each scenario is manageable if you treat split payments as a normal payment workflow and document it clearly. A strong invoice doesn’t just ask for money—it outlines the agreement in a way that prevents misunderstandings.

Decide the right structure before you send the invoice

Before building the invoice, decide how you want the split payments to work. The clearer you are, the easier the invoice is to understand and the easier it is to enforce your payment expectations.

Choose the split type: Is it a deposit and final payment, a milestone plan, or a set number of installments? Pick one approach that fits the project. Avoid complicated schedules unless the contract truly requires it.

Pick exact amounts or percentages: Percentages look simple, but exact dollar amounts eliminate rounding confusion. If you use percentages, ensure the invoice shows the exact dollar value of each portion.

Set due dates: In the US, “Net 15” or “Net 30” terms are common, but split payments usually work better with specific due dates (for example, “Deposit due on receipt” and “Balance due by March 15, 2026”). Specific dates reduce ambiguity.

Define what triggers the next payment: If you’re using milestones, connect each payment to a deliverable or event. For example, “Milestone 2 due upon approval of wireframes.”

Confirm accepted payment methods: If you accept card, ACH, check, or digital wallets, list them. Some clients prefer ACH for larger invoices due to card limits or internal rules.

Once you define the structure, you can reflect it neatly on a single invoice while still letting the client pay in multiple parts. This is usually easier than creating separate invoices unless the work is truly separate.

Single invoice vs multiple invoices: which is better?

Many businesses wonder whether they should create one invoice with split payments or create multiple invoices for each stage. In most cases, a single invoice is cleaner because it keeps the story of the transaction in one place and prevents double-counting.

Use a single invoice when:

1) It’s one project or service with one total price.

2) You want one invoice number for accounting and client records.

3) The client will make partial payments against the same balance.

4) You want the remaining balance to be obvious at any time.

Use multiple invoices when:

1) The work is clearly broken into separate, independent phases that can be billed and closed separately.

2) The client requires separate purchase orders or department billing per phase.

3) Taxes or delivery dates differ in a way that affects reporting.

4) You want each milestone to have its own due date and late fee policy without manual explanation.

Invoice24 supports the single-invoice approach especially well: you can create one invoice, record multiple partial payments, and keep the remaining balance updated. If a client needs multiple invoices, you can also generate them as needed, but a single invoice with a clear payment schedule usually results in fewer questions and cleaner bookkeeping.

How to format an invoice for split payments so clients instantly understand it

The best split-payment invoices are the ones clients don’t have to think about. They read it, nod, and pay. The trick is to include the payment schedule in a place clients naturally look, using plain language.

Include a short payment schedule section: Add a concise block that spells out the split payments. Place it near the totals or in a “Notes” or “Payment terms” area.

Show the total amount clearly: Even if the client is paying in parts, always show the total invoice amount. This prevents confusion and strengthens the sense of a single agreement.

List each portion with amount and due date: If you want 50% upfront and 50% later, show the deposit amount and the balance amount explicitly. If the plan is more complex, list each payment as a line in the schedule.

Explain what happens after partial payment: A client might worry that paying the first portion counts as “paid.” Make it clear that partial payments reduce the remaining balance and the invoice will show what’s still due.

Use consistent labels: Terms like “Deposit,” “Milestone 1,” “Milestone 2,” and “Final Balance” are familiar and reduce back-and-forth.

When you use Invoice24, you can display payment terms and also rely on automatic balance tracking. That combination helps avoid the common client question: “How much do I still owe?”

Step-by-step: invoicing split payments using Invoice24

Split payments are easiest when you treat the invoice as a living record of the transaction. Here’s a practical workflow you can use for most US clients.

Step 1: Create the invoice with a clear total and line items

Start by building the invoice the same way you would for a normal payment. Add your business information, the client’s details, an invoice number, issue date, and the line items that describe the work. Make sure quantities, rates, and descriptions are detailed enough that the client can match the invoice to what they agreed to.

Step 2: Add payment terms that describe the split

In the payment terms or notes section, write a simple schedule. For example: “Deposit of $1,000 due upon receipt. Remaining balance of $1,000 due by April 15, 2026.” If it’s milestone-based, list each milestone with the exact amount and trigger.

Step 3: Send the invoice and request the first portion

When the client receives the invoice, the payment schedule will guide them. If you require a deposit before work begins, state that clearly: “Work begins after deposit is received.” This prevents the situation where you start work and then chase a deposit.

Step 4: Record partial payments as they come in

As the client pays, record each payment against the invoice. Invoice24 will keep a running balance so both you and the client know exactly what remains due. This is crucial for avoiding disputes and for reconciling your bank deposits.

Step 5: Follow up based on the schedule, not emotions

Split payments work best when reminders are predictable. If a milestone payment is due when a deliverable is approved, send the invoice reminder alongside the deliverable handoff. If a due date is approaching, send a polite reminder a few days prior.

Step 6: Close out the invoice cleanly when paid

Once the final portion arrives, the invoice should reflect “Paid” with the full payment history. This is useful for the client’s records, your tax prep, and any future questions about what was paid and when.

How to handle deposits the right way

Deposits are one of the most common split-payment setups in the US. They’re also one of the most misunderstood. Some clients hear “deposit” and assume it’s refundable; others assume it’s a partial payment that is always credited. You can avoid most problems by being explicit.

Call it what it is: If it’s a non-refundable booking fee, say “non-refundable booking fee.” If it’s a refundable deposit tied to conditions, define the conditions. If it’s simply an upfront partial payment, call it a “deposit (credited toward total).”

Connect deposit payment to scheduling: If your schedule is tight, explain that the date is reserved only when the deposit is paid. Clients understand this, and it helps them prioritize payment.

Keep it simple on the invoice: Your invoice total remains the full amount, and the deposit is part of the payment schedule. When the deposit is paid, it reduces the remaining balance.

Don’t hide policies in tiny text: If you have a deposit policy, put it in clear sentences in the payment terms or in your service agreement. The invoice should reflect the reality without surprising the client.

Invoice24 makes deposit tracking easy because you’re not forced to treat deposits as a separate document. You can keep one invoice and allow the deposit to be logged as the first partial payment.

Milestone payments: make them client-friendly

Milestone payments can protect you on larger projects because they align cash flow with progress. But they can also confuse clients if you don’t connect milestones to tangible events.

Define milestones in plain language: “Kickoff,” “First Draft,” and “Final Delivery” are better than internal jargon. Your client should instantly understand the payment triggers.

Make approval points explicit: If a milestone is due upon approval, define what “approval” means. Is it an email confirmation, a signed proof, or an in-app approval? Make it practical.

Limit the number of milestones: Too many installments can feel like nickel-and-diming. Most projects work well with two to four payments.

Keep the invoice readable: Put milestones into the payment schedule section rather than making the line items chaotic. The line items should describe the work; the schedule should describe how it’s paid.

With Invoice24, you can keep the single invoice intact while still accepting milestone payments. Each partial payment updates the balance, and your records stay tidy.

Multiple payers: when two people or departments share the bill

Sometimes the split isn’t over time—it’s between payers. For example, a couple might split an event invoice, or a company might have two departments splitting a shared service. This can be tricky if you’re not careful, because you still want one clear agreement and one clean record.

Make the total and each payer’s portion explicit: In the payment terms, write something like: “Payer A: $750 due by March 1, 2026. Payer B: $750 due by March 1, 2026.”

Clarify who receives the invoice: If one person is your primary client contact, send the invoice to them and copy the other payer if appropriate. Alternatively, send the same invoice to both parties if your workflow supports it, ensuring everyone sees the same details.

Ask for payer identifiers in payment notes: If two people pay by bank transfer or check, request they include the invoice number and their name. This reduces confusion when payments arrive separately.

Track partial payments carefully: When each payer sends their share, record the payments separately so your invoice history matches reality.

Invoice24’s partial payment tracking is ideal here because you don’t have to create duplicate invoices or manually calculate who still owes what. You simply record each payment and the remaining balance updates automatically.

Installment plans without making it complicated

Installment plans can be a win-win: the client gets manageable payments, and you get a structured path to full payment. The risk is that installment plans can drift, especially if the client isn’t used to paying on a schedule.

Set a cadence and stick to it: Weekly and monthly are easiest for clients. Avoid irregular schedules unless there’s a strong reason.

Put dates on everything: Instead of “three monthly payments,” write the exact due dates. This is far clearer for US business accounting and for client reminders.

Specify what happens if a payment is late: If you charge late fees, list them. If you pause work until payments catch up, say so. Clients don’t like surprises, but they accept clear policies.

Keep the invoice total stable: Installment payments should usually reduce the same invoice balance. If you add more work, add it as an additional line item or a separate invoice, depending on your agreement.

Invoice24 supports installment-style partial payments by letting you accept multiple payments over time and keeping the remaining balance visible at all times.

How taxes work on split payments in the US

Taxes can be a point of confusion with split payments, especially if you’re collecting sales tax on taxable goods or taxable services in certain states. The key principle is that the invoice should accurately reflect the taxable amount and tax calculation, regardless of how the customer pays.

Sales tax is calculated on the taxable portion of the invoice: If your invoice includes taxable items, calculate sales tax based on the taxable line items according to your local requirements. The payment schedule doesn’t change what is taxable; it only changes when you receive funds.

Show tax as part of the total: Your invoice total should include tax where applicable. Then split payments are applied against that total. Clients should not have to compute “tax later.”

Be consistent with partial payments: If a client pays 50% upfront, they’re paying 50% of the total invoice amount (which includes any tax you’ve charged). Your records should show that each partial payment is applied to the invoice balance.

Keep good records for reporting: Split payments mean multiple payment dates. For bookkeeping, it’s useful that your invoice history shows exactly when payments were received. This helps you and your accountant when reconciling cash flow, taxes, and revenue recognition methods.

Invoice24 keeps your totals, taxes, and payment history together so that split payments don’t create gaps in your reporting.

Payment methods in the US: what to offer for split payments

Split payments are smoother when your client can pay the way they prefer. In the US, different clients gravitate toward different methods depending on invoice size, internal controls, and convenience.

Credit and debit cards: Great for speed and convenience. Some businesses have card limits or require approvals for large charges, so they might prefer to pay only the deposit by card and the remainder by ACH.

ACH bank transfers: Often preferred for larger amounts. ACH can be easier for clients who want a direct bank payment, especially businesses.

Checks: Still common in certain industries, though slower. If accepting checks, encourage clients to include the invoice number and mail early enough to meet due dates.

Wire transfers: Less common for domestic small-business invoices, but sometimes used for high-value transactions or specific business processes.

Mixed methods: A client might pay a deposit by card and the rest by ACH. Make sure your invoice and records handle mixed-method partial payments cleanly.

Whatever methods you accept, list them clearly and make paying easy. Clients are much more likely to follow your split-payment schedule when the payment process is frictionless.

How to write split-payment terms that prevent disputes

The biggest problems with split payments usually come from vague terms. If a client misunderstands when something is due or what it covers, you can end up with delayed payments, scope arguments, or strained relationships. Clear terms prevent most of this.

Use straightforward language: Avoid legal-sounding clauses unless you need them. Simple sentences are more effective: “Deposit due upon receipt. Final balance due within 7 days of delivery.”

Define whether work pauses for non-payment: If you plan to pause work when a milestone payment is late, say so. This is common in service contracts and helps protect your time.

Explain refund rules if relevant: If deposits are non-refundable or partially refundable, state it. If refunds depend on cancellation notice, define the timeline.

Clarify scope and change requests: Split payments can make scope creep worse if the client assumes the next payment covers “anything else they think of.” Note that additional work is billed separately or requires written approval.

Include late fees only if you enforce them: If you mention late fees, be prepared to apply them consistently. If you prefer softer enforcement, you can instead state that access to deliverables is granted after payment is complete.

Invoice24 helps by keeping your terms visible on the invoice and by recording a clean payment timeline that can be referenced if questions arise.

Practical examples of split-payment invoices

Here are some examples you can adapt for your own invoices. The goal is to show clients exactly what to pay and when, without making the invoice cluttered.

Example 1: 50/50 deposit and final

Payment schedule: “Deposit of $1,250 due upon receipt. Remaining balance of $1,250 due by May 10, 2026 (or upon project delivery, whichever comes first).”

Example 2: Three milestones

Payment schedule: “Milestone 1 (Kickoff): $900 due upon receipt. Milestone 2 (First Draft Delivered): $1,200 due upon delivery of first draft. Milestone 3 (Final Delivery): $900 due upon final delivery.”

Example 3: Two payers splitting evenly

Payment schedule: “Payer A: $600 due by March 5, 2026. Payer B: $600 due by March 5, 2026. Please include invoice number in payment note.”

Example 4: Monthly installments

Payment schedule: “Installment 1: $500 due upon receipt. Installment 2: $500 due April 1, 2026. Installment 3: $500 due May 1, 2026.”

These examples are short, readable, and leave little room for confusion. They also work perfectly with partial payment tracking because each payment reduces the invoice balance until it’s paid in full.

How to follow up on split payments without annoying your client

Following up is part of business, but split payments can create more follow-ups if you don’t systematize them. The best approach is predictable, polite, and tied to the schedule you already agreed on.

Send a reminder before the due date: A simple reminder 3–5 days before a milestone or installment is due can prevent delays. Keep it friendly and assume good intent.

Send a “due today” note: If the payment is due today, a short message with the invoice number and amount due can help busy clients act quickly.

Reference the remaining balance: With partial payments, the most helpful detail is “remaining balance.” This reduces back-and-forth and helps clients pay the correct amount.

Connect payment to next steps: For milestone payments, reminders are easiest when paired with deliverables: “I’ve attached the draft. Once Milestone 2 is paid, I’ll proceed to revisions.”

Keep emotion out of it: Split payments are normal. Treat them like a process, not a personal issue. Clients respond best to calm, consistent communication.

Invoice24 supports this workflow by keeping invoice status and payment history transparent, so your follow-ups can be specific and objective.

What to do when a client pays the “wrong” amount

This happens more often than you’d think. A client might pay the deposit but accidentally pay the full balance, or they might pay less than expected due to a misunderstanding. The solution is to rely on the invoice as the source of truth and keep your response clear and professional.

If they overpay: Confirm receipt and explain the options. Depending on your policy, you can refund the overage or apply it as a credit toward future work. Make sure the invoice reflects the payment accurately so you can account for it correctly.

If they underpay: Thank them for the payment and state the remaining balance with the due date. Often, clients simply misread the number or made a quick payment from a phone.

If they pay the wrong milestone: Clarify the schedule and update them on what is currently due. If you’re flexible, you can accept the payment as a partial and continue, but be explicit about what remains due before the next step.

Because Invoice24 tracks partial payments and remaining balance, you can respond with exact numbers instead of estimates, which makes these situations easier to resolve.

How split payments affect bookkeeping and reconciliation

From an accounting perspective, split payments mainly mean you’ll see multiple deposits for the same invoice. That’s not a problem as long as you can tie each deposit to the invoice and keep your records consistent.

Always reference the invoice number: Encourage clients to include the invoice number in the payment memo or notes. This is especially important for ACH and checks.

Record each payment separately: Don’t lump partial payments together mentally. Your invoice should show each payment date and amount so you can match them to bank deposits.

Watch out for fees: If a payment method charges processing fees, ensure you’re reconciling the net deposit correctly. Your invoice should reflect what the client paid; your bank may show the net after fees.

Keep communication in one place: When clients ask about balances, respond using the invoice record. This avoids confusion and keeps your client experience professional.

Invoice24’s payment history and balance tracking make reconciliation far easier because you have a single invoice record that reflects every payment event.

Reduce risk with split payments: practical safeguards

Split payments can reduce risk, but only if you structure them thoughtfully. Here are common safeguards used by US freelancers and small businesses.

Require a deposit to start: This protects your time and confirms client commitment.

Align payments with deliverables: If a client delays payment, your work can pause at a natural checkpoint rather than after you’ve delivered everything.

Use clear acceptance criteria: For example, specify how many revision rounds are included before the final balance is due.

Don’t deliver final files or provide full access until paid: This is a standard practice in many industries. If you do it, mention it politely in your terms so it isn’t a surprise.

Keep documentation consistent: Your invoice, contract, and emails should tell the same story. Consistency is one of the simplest ways to avoid disputes.

When split payments are paired with clear terms and good tools, they help you maintain cash flow and reduce the chance of non-payment.

Common mistakes to avoid when invoicing split payments

Even experienced businesses sometimes trip over split payments. Avoid these pitfalls to keep your invoicing professional and easy to manage.

Being vague about due dates: “Due on completion” can mean different things. Use specific dates or clear triggers.

Not stating what the deposit is for: If you don’t define whether it’s refundable, clients will fill in the blanks with assumptions.

Creating separate invoices unnecessarily: Multiple invoices can confuse clients and lead to partial payments being applied incorrectly. Use one invoice when it’s one project.

Forgetting to log partial payments: If you don’t record payments promptly, your balance will be wrong and reminders will look unprofessional.

Mixing scope changes into the same schedule without documentation: If the project grows, update the invoice with approved additions or issue a separate invoice for extra work.

Not making it easy to pay: If paying is inconvenient, clients delay. Offer practical payment methods and make instructions obvious.

Make split payments feel seamless for your clients

The best client experience is one where the client feels guided, not pressured. Split payments can actually improve the experience when you communicate them as a helpful option rather than a workaround.

Present split payments as a standard choice: For example: “You can pay the invoice in full or in two payments (deposit + final).” Clients like having options, especially when budgets are tight.

Keep the invoice layout clean: Don’t overwhelm the client with paragraphs. Use a short schedule block and keep the rest of the invoice standard.

Use professional language: Avoid wording that sounds uncertain. Clear, confident terms make the schedule feel normal.

Provide instant clarity on the balance: A client should always know what they’ve paid and what remains. That clarity builds trust and speeds up payment.

Invoice24 is built around that idea: your invoice should look professional, payment should be easy, and tracking should be automatic so you can focus on your work.

Final checklist for invoicing split payments in the US

Before you send your next split-payment invoice, run through this checklist:

1) The invoice shows a clear total amount with detailed line items.

2) The payment schedule is written in plain language with exact dollar amounts.

3) Each payment has a due date or a clear trigger tied to a milestone.

4) Accepted payment methods are clearly listed.

5) Deposit rules (if any) are stated clearly.

6) Your policy on late payments and work pauses is included if you enforce it.

7) You will record each partial payment promptly to keep the balance accurate.

8) The client can easily see the remaining balance at any time.

When you follow this checklist, split payments become routine. Clients appreciate the flexibility, you protect your cash flow, and your invoicing stays clean and professional. With Invoice24, you can create a single invoice, accept partial payments, track every installment, and keep your business finances organized—without turning split payments into a confusing process.