Bill a project in stages you agree in the quote: a deposit before you order hardware or licences, milestone invoices as each piece of work is delivered, and a final invoice on sign-off. Then collect project invoices in the same place as your monthly fees, so they're chased and matched like everything else and don't rely on someone remembering.
In this article
The short version
- Agree payment stages in the project quote before any work starts.
- Take a deposit for hardware and licences, and order once it's paid.
- Invoice milestones as each piece of work is delivered, then send the final invoice on sign-off.
- Put payment terms, sign-off and statutory interest in the quote.
- Collect project invoices in the same place as your monthly fees so they're chased and matched too.
Why project invoices slip
Your managed services fees mostly run themselves. The repeating invoice goes out from Xero or QuickBooks, the direct debit collects it, and nobody has to think about it. A server replacement or an office move doesn't fit that routine. Someone raises the invoice by hand, the client pays by bank transfer when their own approval comes through, and someone else has to spot the payment and match it.
So one-off work tends to fall through the gaps. Engineers wait for finance to confirm a deposit before ordering kit, finance doesn't know the quote was accepted, and the final invoice goes out weeks after go-live because the project lead moved straight on to the next job. Meanwhile you've often paid the distributor for the hardware and licences already.
Most of this goes away if you decide when the money comes in before the work starts, and write it into the quote.
How to stage the payments
Three stages are enough for most MSP projects.
The deposit covers what you buy on the client's behalf: hardware, annual licences and any third-party costs you can't cancel. Ask for it on acceptance and place the order once it's paid, so you're never funding kit for a client who changes their mind.
Milestone invoices cover the labour as it's delivered. Tie each one to something the client can see, like "mailboxes migrated" or "new firewall live", so there's little to debate when the invoice arrives.
The final invoice goes out on sign-off. Define sign-off in the quote, and agree a date after which the work is treated as accepted if nobody raises a problem, so the last payment doesn't wait on a review meeting that keeps moving.
Say you quote £9,600 for a server replacement and Microsoft 365 migration, including £3,800 of hardware. You invoice £3,800 on acceptance and order the kit when it's paid, £3,000 when the migration's complete, and £2,800 on sign-off. At no point are you more than one stage of labour out of pocket, and you're never carrying the hardware.
Small jobs of a day or two can go on a single invoice, but it's still worth asking for hardware costs up front.
What to put in the quote
Terms that aren't written down tend to get negotiated at the worst moment, usually when the final invoice lands. Before the client signs, check the quote covers:
- the deposit amount and what it pays for
- each milestone, its amount and the deliverable that triggers it
- how sign-off works, and when the work is treated as accepted
- payment terms in days for each invoice, and how the client can pay
- a line saying statutory interest applies to late payment
If you don't agree a payment date, a business invoice is late 30 days after the client receives it, and from then you can claim interest at 8% above the Bank of England base rate plus a fixed sum of £40 to £100. Having it in the quote makes it harder to argue with later.
How to collect project money alongside the monthly book
The simplest fix is to stop running projects as a separate process. Adfin puts one-off invoices and payment links in the same place as your recurring direct debits, so the deposit for a new firewall sits next to the client's monthly retainer, gets chased on the same schedule, and shows as paid in Xero or QuickBooks as soon as it lands.
Project payments often come by transfer, so each client gets their own bank details, in your business's name, and a milestone payment matches itself to the right invoice even when the reference is missing. If a client wants to pay a large invoice in parts, you can allow partial payments and set the minimum yourself, as a percentage of what's owed or a fixed amount.
When a milestone invoice goes quiet, Adfin's collection agents can follow it up within rules you approve. If the client's working through a snag list with your team, you can pause chasing for just that client and switch it back on when the snags are closed.
Common questions
What if the project scope changes halfway through? Agree the change in writing with its own price, and invoice it as an extra milestone so the original stages stay as quoted.
How much deposit should I ask for on an IT project? There's no set figure. Covering the hardware, licences and other costs you can't cancel is a sensible minimum, and some MSPs add a share of the labour on larger projects.
Can I collect a project invoice by direct debit? You can if the client already has a mandate whose collections follow the invoice amount, as Adfin's do, and they're told at least three working days before each payment. Check your payment limits for larger invoices, and budget for the extra 0.3% on direct debits over £2,000.
What payment terms should I use for project invoices? Deposits are usually due on acceptance, since nothing gets ordered until they're paid. For milestone and final invoices, pick a number of days and put it in the quote; with no agreed date, 30 days applies by default.
What if the client won't sign the project off? Use the acceptance date you agreed in the quote and send the final invoice then. List any outstanding snags separately so they don't hold up payment for the work that's done.
Should project work go on the monthly invoice? Small one-offs can. Larger projects are better on their own invoices, so a query about the project doesn't hold up payment of the retainer.
Sources
- GOV.UK - Late commercial payments: charging interest on commercial debt (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
- Adfin - Accept payments (accurate as of October 2026) https://adfin.com/accept-payments
- Adfin - An introduction to Adfin bank transfers (accurate as of October 2026) https://support.adfin.com/en/articles/12600901-an-introduction-to-adfin-bank-transfers
- Adfin - Changelog (accurate as of October 2026) https://www.adfin.com/changelog
