What is an advance payment and when should you require one?

Requiring an advance payment (also called a deposit, retainer, or upfront payment) is the single most effective way to reduce bad debt and payment risk. A client who has already paid 25–50% of a project is financially committed and psychologically invested in the relationship in a way that a client who has paid nothing is not.

Standard advance payment structures: 50% upfront / 50% on completion (common for project-based work), 25% upfront / 75% on completion (common for larger engagements), retainer (fixed monthly amount paid at the start of each period). For new clients with no payment history, requiring an advance is not aggressive — it is a standard business practice that most professional clients expect.

Advance payments also serve as a creditworthiness filter. A client who pushes back hard on any upfront payment, or who asks to delay the deposit 'just this once,' is sending an early signal about their payment behavior. The discomfort of that negotiation is much cheaper than chasing an unpaid final invoice six weeks later.