As a small business owner, one of your primary responsibilities includes maintaining a healthy relationship with your clients. And one way to ensure your clients are satisfied and interested in your firm is by providing a partial payment option. Partial payments need you to put trust in your clients.

It also benefits the business as you get some portion of the payment upfront allowing you to invest it in your business. It lets you ask for some amount of payment to be received upfront and partial payments made monthly on a schedule mutually decided.

It is a viable method to encourage your customers to make sales from your business. This facility provides an opportunity to increase sales and grow your customer base. This eventually helps gain a competitive edge over your customers. It is also a good security measure and cash flow.

Now let us look into the details and meaning of the partial payments plan.

Meaning of Partial Payment

The partial amount of the invoice that is paid in full at the time of purchase is referred to as a partial payment.

Both your company and the customer would benefit from providing payment in installments as an alternative for those who lack the essential purchasing power. By providing a simple payment option, you might encourage customers to make a purchase, improve their shopping experiences, and cash flow, and increase brand loyalty.

In real estate deals, the buyer usually makes an upfront payment to cover a portion of the entire property value, and the remaining balance is either paid in individual installments or is satisfied by borrowing money from a mortgage company.

On the other hand, in typical business contexts, partial payments are also paid to place service orders, with the remaining balance being provided once the service has been adequately performed. The vendor is incentivized to deliver the service as promised to receive the remaining money by providing the client access to a portion of the payment.

A partial payment just represents a portion of the total. Customers who are behind on their payments can be offered to partially pay in installments, or you can demand partial payment before beginning a contract with a new customer.

Partial Payment Example

Providing clients with a variety of payment options is a significant convenience that enhances their perception of value in your brand. Customers are more inclined to make and stick with purchases if they believe they can collaborate with a company to create personalized payment plans.

Situations like this frequently occur in service supplier industries when it is necessary to require a deposit equal to a portion of the total amount due to ensure that the remaining sum will be paid.

  1. An independent contractor could charge hourly for longer projects. It aids in defraying the contractor’s expenses. You are certainly familiar with what partial payment means if you work in construction. Predicting the end cost while working on major, long-term projects under contract may be difficult; there may be additional overhead costs or difficulties. Thus upfront payment is really helpful.
  2. Real estate transactions typically involve an initial payment from the buyer equivalent to a fraction of the property’s total value, followed by monthly payments or a mortgage obligation for the remaining balance.
  3. When ordering services in a typical business setting, partial payments are also accepted; the remaining balance is paid when the services have been completed. Allowing the buyer to keep a portion of the cash, encourages the service provider to finish the work on time in exchange for the remaining amount.

The buyer has the option to withhold money as compensation if there is a balance owed if these conditions hurt the company being purchased.

Creating Partial Payment Request on an Invoice?

Accepting partial payments will help you receive the entire amount owed. The following are some recommendations for paying off overdue invoices in part:

1. Make a Payment Plan that is Effective for You

Make a plan for the unpaid budget installment payments with the client. To relieve yourself of at least one load in this circumstance, use an invoice generator or invoice templates.

The customer pays the total amount of the installment payment over a predetermined period in smaller, more manageable installments. Once the parameters of the installment plan have been agreed upon, you must put them in writing and obtain the client’s signature for the agreement to be enforceable in court.

2. Choose the Due Dates

Next, check to see that the installment plan includes exact payment due dates. If your customer owes $10,000 and the agreed payment plan contains 5 $2,000 installments, you must finalize the due dates for each of the invoice payments. Make sure your contract specifies the deadlines.

3. Frequently Sent Reminders

You may wish to send invoice reminders more frequently than you would under typical invoicing circumstances once your payment plan is in place. Because the client has a history of not paying on time, you might wish to send a reminder whenever a payment is due rather than just when an installment invoice is past due.

Follow up by phone and email as soon as the payment is overdue, but always be kind and considerate.

How are Partial Payments Different from Payment Schedules?

There are two ways to get money in installments: partial payments and payment schedules. Payment schedules have a specified amount due on set days.

Partial Payments enable your clients to pay any amount they please. Both of these are smart ways to make sure you are paid for your job as you go without having to send out several invoices.


Allowing your consumers to make partial payments may encourage them to make purchases because they won’t have to pay the entire amount at once. You may boost sales and win over a lot of clients by giving them a convenient payment option.

Nowadays, partial payments on an invoice are typical. The issue is that it may be simple for a customer to forget how much they still owe when they pay your invoice in a series of installments.

You may easily keep track of your invoice payments with the help of invoicing software like Moon Invoice, which aligns each payment with the right invoice.