Partial payment - What is partial payment?
Partial payment refers to the payment of an invoice that is less than the full amount due.
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Partial payment is normally half of the total amount or a percentage of it.
In some cases, you might need to create an invoice where part of the total amount needs to be paid in advance just like a deposit. Cases like this are typical for businesses that provide services, where part of the final amount due will be required in advance as a sort of guarantee for completion of the payment.
If you are working in construction, you are probably already familiar with partial payments. When working on large long-term projects under a contract, it can be hard to estimate the final cost; there might be some extra overhead expenses or problems which might be incurred. Therefore it’s common that the customer is invoiced and will make partial payments until the job is fully completed.
Partial payments simply allow your customers to pay part of the total amount owed in installments as long as the total amount is paid before the required date.
Partial payments are now common within invoicing. The problem however is that when customers pay your invoice over a series of payments, it can be easy to lose track of what they still owe.
Invoicing software helps you easily keep track of your partial payments, and will normally match each payment to the corresponding invoice.
Giving your customers the option to make partial payments can actually encourage them to make purchases since they will not need to make the full payment all at once. This could lead to an increase in your sales and could make many of your customers happy as it gives them an easy payment option.