Deposits and partial payments in 5 invoice tools

Key takeaways

• Square states you can schedule the initial deposit and split the remaining balance into multiple payments, according to Square.
• Stripe allows you to charge any amount less than or equal to the total of the remaining balance on the invoice, according to Stripe.
• FreshBooks lets clients pay invoices in multiple and partial installments on dates of your choosing, and payment schedules only work with invoices, not recurring setups or retainers, according to FreshBooks. Partial payments let clients pay any amount they want, according to FreshBooks.
• Xero suggests a combined invoice method that includes deposit terms on the full invoice, such as “30% advance, EOM” (30% due now, balance due at month end), according to Xero.
• PayPal documents that allow_partial_payment: true with a minimum_amount_due supports deposit-first or installment workflows common in service businesses, according to PayPal.

Can a customer pay a deposit or part of an invoice in these five tools?

Square’s support page states that you can schedule the initial deposit and split the remaining balance into multiple payments, according to Square.

Stripe’s documentation notes that you can charge any amount less than or equal to the total of the remaining balance on the invoice, according to Stripe.

FreshBooks explains that payment schedules allow you to create a payment plan for clients so they can pay invoices in multiple and partial installments on dates of your choosing, according to FreshBooks.

Xero’s guidance on invoice payment terms suggests a combined invoice method where you include deposit terms on the full invoice, such as “30% advance, EOM” (30% due now, balance due at month end), according to Xero.

PayPal’s developer documentation indicates that setting allow_partial_payment: true with a minimum_amount_due supports deposit-first or installment workflows common in service businesses, according to PayPal.

How we compared: the official pages we read and what we looked for

We examined the official documentation pages for Square, Stripe, FreshBooks, Xero, and PayPal to identify how each describes deposits, partial payments, and payment schedules. The goal was to distinguish between step-by-step product instructions and general guidance on invoice terms. For Xero, the page titled "Invoice payment terms: definitions, examples, and tips | Xero US" provides general guidance on writing terms, such as a combined invoice method that includes deposit terms on the full invoice, such as “30% advance, EOM” (30% due now, balance due at month end) according to Xero. This page does not provide a step-by-step product menu for setting up these features in the software.

For PayPal, the page titled "Use cases | PayPal Developer" is developer documentation rather than a user-facing product guide. It notes that allow_partial_payment: true with a minimum_amount_due supports deposit-first or installment workflows common in service businesses according to PayPal. Because this is technical documentation, it describes API parameters rather than the interface a freelancer would use to create an invoice.

Deposits: how each page says to ask for money up front

Square’s support page describes a direct method for requesting money before the full work is done. The page states that you can schedule the initial deposit and split the remaining balance into multiple payments according to Square. To set this up, the page instructs users to look for the deposit request area. Specifically, it says to click Percentage (%) or Amount ($) under the deposit request option according to Square. This allows the invoice creator to choose whether the upfront payment is a fixed dollar amount or a portion of the total invoice value. The page frames this as part of managing invoice deposits and payment schedules, indicating that the tool supports defining the initial payment structure directly within the invoice creation process.

Xero’s guide on invoice payment terms offers a different approach, described as general guidance rather than a specific software menu step. It outlines the "deposit invoice method," which involves sending a separate invoice for the deposit amount and then sending a final invoice when the work is complete according to Xero. This method relies on issuing two distinct billing documents rather than configuring a single invoice with multiple payment stages. The guide presents this as a way to structure payment terms, but it does not provide the same interface-level instructions as the Square page. Instead, it describes the workflow of creating a deposit invoice first, followed by a completion invoice later.

PayPal’s documentation is developer-focused and does not state a step-by-step menu for setting up deposits in the same way the Square page does. The specific method for requesting a deposit on a standard merchant interface is not stated on the PayPal page.

Partial payments and payment schedules: what is allowed and what is limited

A partial payment allows a customer to pay a portion of an invoice total, while a payment schedule breaks the total into set amounts due on specific dates. The five pages distinguish these methods differently. Only Square, Stripe, and FreshBooks state a specific limit, while Xero and PayPal stay UNKNOWN.

FreshBooks defines payment schedules as a way to create a payment plan for clients so they can pay invoices in multiple and partial installments on dates of your choosing, according to FreshBooks. This tool is limited to standard invoices; the page states that payment schedules only work with invoices, not recurring setups or retainers, according to FreshBooks. If you use retainers or recurring billing setups in FreshBooks, you cannot attach a payment schedule to them.

Square describes setting up to 12 milestone payments on an invoice, according to Square. These milestone payments function as a structured schedule. However, the page notes that payment schedules are not available with late fees, according to Square. If you apply late fees to an invoice in Square, you cannot also set up a payment schedule for that same invoice. You must choose between applying late fees or setting up milestone payments.

Stripe documentation explains that to accept partial payments on the hosted invoice page, you must enable partial payments in your Invoice settings page in the Dashboard, according to Stripe. This setting controls whether customers can pay less than the full amount on the hosted page. The documentation also states that partial payments aren’t supported for subscription invoices that are charged automatically, according to Stripe. If you use Stripe for subscription billing where the card is charged automatically, the customer cannot make a partial payment against that invoice. This limit applies specifically to automatically charged subscription invoices.

The distinction between a partial payment and a schedule is clear in these definitions. FreshBooks says partial payments let clients pay any amount they want, and Stripe says you can charge any amount less than or equal to the total of the remaining balance on the invoice. A payment schedule is a pre-defined plan with multiple installments due on specific dates. FreshBooks explicitly calls its schedules "partial installments on dates of your choosing," according to FreshBooks. Square refers to "milestone payments," which implies fixed points in time, according to Square. Stripe separates the concept of "partial payments" from subscription billing, noting the restriction on automatically charged invoices, according to Stripe.

When setting up these features, check the specific invoice type you are sending. If you are using recurring setups in FreshBooks, the schedule feature will not apply, according to FreshBooks. If you are using late fees in Square, the schedule feature is unavailable, according to Square. If you are using automatic subscription charges in Stripe, partial payments are not supported, according to Stripe.

The filled reference table: one row for each publisher, from its own page

The table below summarizes the specific capabilities and limits stated on each publisher's official page. If a cell is marked UNKNOWN, the specific publisher's page does not state that feature.

Check the product interface for any feature marked UNKNOWN before sending an invoice.

Write your deposit terms before you send the invoice

Draft the specific terms you will print on your next invoice before opening any software. The distinction between a flexible amount and a fixed timeline matters for how you phrase the request. As noted on the FreshBooks page, "Partial Payments allow your clients to pay any amount they want, whereas Payment Schedules have a set amount due on set dates" according to FreshBooks. Use that distinction to decide whether your client chooses the amount or you dictate the dates.

Illustrative example: three payments on a 100 job

A job totals 100. Ask for 40 up front, then two payments of 30. Those 3 payments add to 100, so nothing is left open. If 50 is paid first, 50 remains, and one more payment of 50 finishes the bill. You might instead set 5 due dates and still use only 3 of them for 40, 30, and 30. A plan with 12 dates would leave most of those dates unused on this small job. Write the dates down before you send the invoice, and keep every amount fixed.

One step to take today

On paper, write the upfront amount and the date for each later payment before you open the invoice screen today.

FAQ: deposits and partial payments on invoices

What is the difference between a deposit and a partial payment?

A deposit is a specific upfront amount requested before work begins, distinct from the flexible nature of a partial payment where the client chooses the sum. A partial payment allows clients to pay any amount they want, whereas a payment schedule has a set amount due on set dates, according to FreshBooks. The key distinction lies in who sets the amount: the client for partial payments, or the seller for scheduled installments.

Can I set a payment schedule with set dates and amounts?

Yes, payment schedules allow you to define specific amounts and due dates for each installment. Square supports up to 12 milestone payments within a single invoice, according to Square. FreshBooks also enables schedules with dates of your choosing, allowing you to break an invoice into multiple fixed payments rather than a single balance.

Does a payment schedule change when an invoice counts as overdue?

A payment schedule of 5 payments that are all overdue will trigger 3 payment reminders each, for a total of 15 reminders, according to FreshBooks.

Can a customer overpay or pay more than once?

Stripe handles overpayments by automatically crediting the excess funds to the customer’s credit balance, according to Stripe.

Why does this guide not recommend a deposit percentage or a best tool?

The official pages provide examples and limits, such as Square’s note that payment schedules are not available with late fees, according to Square, but they do not offer measured results or legal advice. Stripe notes that partial payments aren’t supported for subscription invoices that are charged automatically, according to Stripe, which is a technical limit rather than a recommendation. Since these sources describe functionality and constraints rather than business outcomes, no single tool is declared best, and no specific deposit percentage is recommended as normal or effective.