A deposit split into instalments may not fund the first material order

The total deposit hides its timing

The customer agrees to a deposit, but wants to pay it in several instalments. Before accepting the schedule, compare each payment with the purchases and commitments needed to start. A sufficient total can still leave the business funding the first stage from its own cash. Do not describe the full promised deposit as available money when only the first portion is due.

Identify the first committed outlay

Ask purchasing what must be ordered, when payment is required and whether the order can be changed or cancelled. Use actual supplier terms rather than a rough percentage of the contract. Distinguish a preliminary enquiry from a binding order. The relevant question is the cash required before the next customer instalment, including any commitments that cannot easily be reversed.

Put the payments into their actual periods

Business.gov.au's cash-flow guidance separates incoming and outgoing money by timing. Show each deposit instalment and supplier payment individually, with assumptions labelled. Do not net the total deposit against the total procurement cost and conclude that the opening stage is funded. The sequence can matter even where the final totals look comfortably positive.

Source: business.gov.au: Set up a cash flow statement

Consider a hypothetical early order

Imagine a $15,000 deposit split into three payments, while a custom material order requires $10,000 after the first $5,000 arrives. The plan contains an initial funding gap despite the larger total deposit. The example does not decide what deposit can lawfully be requested. Contract terms and any applicable industry or consumer requirements need specific advice.

Agree the work sequence deliberately

Discuss a realistic payment and procurement sequence with the customer and advisers. Check what existing obligations would apply if an instalment is late; do not assume you can suspend work whenever you choose. Avoid placing the order before the funding position is understood simply because the customer agreed to the full deposit amount in principle.

Monitor each stage independently

Track the actual receipt and the purchase it supports. If the timing changes, reassess the next commitment before carrying forward the old assumption. Keep the customer's total deposit promise separate from confirmed cash. A staged arrangement is useful only when its payment sequence fits the obligations the business is undertaking to deliver the job.