Partial Invoices and Installment Billing: How to Structure Them

For long projects, a single invoice at the end is risky. Partial invoices (Abschlagsrechnungen) let you bill as you go, tied to milestones or time periods.

Deposit vs. milestone billing

A deposit (Anzahlung) is billed up front before work starts, usually as a percentage of the total. It protects you against a client who cancels after you have committed time or bought materials.

Milestone invoices are tied to defined deliverables or phases. You bill when a phase is completed, which aligns your income with the actual progress of the project.

Both approaches are legitimate and widely used in Switzerland. Many projects combine them: a deposit to start, then milestone invoices as phases complete, then a final settlement.

Agree the schedule in the contract before you start. Without a written plan, a client can contest the timing of a partial invoice, and the dispute is far harder to resolve after the fact.

• Agree the schedule in the contract before you start.
• Number each partial invoice in your normal sequence.
• Show a running total of what has been billed so far.

Structuring each partial invoice

Every partial invoice is a full invoice in its own right. It needs the same mandatory fields as any other invoice: your details, the client, a date, a number, a description and an amount.

Reference the overall project clearly on every partial invoice. A project name or contract number lets both sides see which whole the partial belongs to.

Describe exactly what the partial invoice covers. "Deposit on contract" or "Milestone 2 of 4: design approved" tells the client what they are paying for and prevents later confusion.

Show a running total of what has been billed so far, so the client always knows how much of the project is paid. This transparency reduces pushback when the next partial arrives.

VAT and bookkeeping for partials

If you are VAT-registered, each partial invoice triggers VAT in the period it is issued. You report the VAT on the partial amount when you issue the invoice, not only at the end of the project.

A deposit also carries VAT at the time you receive or invoice it. Do not wait until the final invoice to account for VAT that was triggered months earlier.

For your books, each partial invoice is a separate revenue entry. That keeps your income recognised as the project progresses rather than landing all at once in the final month.

Number the partials in your normal consecutive sequence. The project may have its own internal reference, but the invoice numbers themselves must stay unique and traceable like any other.

Final settlement

Close the project with a final invoice that lists all partial invoices and the remaining balance. This gives the customer the complete picture of what they have paid and what is still owed.

The final invoice should subtract the deposits and partials already billed and show only the remaining amount as payable. A client who sees the full breakdown is far less likely to question the balance.

If the project came in under or over the original estimate, the final invoice is where the adjustment happens. State the change clearly so the variance is documented rather than buried.

Keep the final invoice numbered in the same sequence as the partials. The paper trail should read as one continuous story from the deposit to the closing balance.

• Deposit up front, milestones as phases complete.
• Each partial is a full invoice with its own number.
• Charge VAT on each partial in the period it is issued.
• Final invoice lists all partials and shows only the balance due.