Deposit and payment policies are not just administrative details. They protect your cash flow, filter out uncommitted customers, and define the professional relationship from the start. Most upholstery shops that have cash flow problems are not undercharging; they are failing to collect money at the right stages.

Why Deposits Are Non-Negotiable

Upholstery work requires significant material investment before any labor starts. Fabric orders are typically non-returnable. Foam and specialty materials are cut to order. If a customer cancels after you have ordered materials, a shop without a deposit absorbs the full material cost. A deposit makes the customer financially committed before you spend money on their behalf.

Standard practice is a 50% deposit at order placement. Some shops use a tiered structure: 30% at booking, 20% when fabric is ordered, 50% at pickup. Either works. What matters is that you have the cost of materials covered before you spend it.

What the Deposit Covers

Be explicit in your quote and on your invoice: the deposit covers the cost of materials ordered on the customer's behalf plus a portion of labor. This framing helps customers understand that the deposit is not arbitrary. It reflects real expenditures made specifically for their job. Customers who understand this are less likely to resist the deposit requirement.

Handling COM and Customer-Supplied Fabric

When a customer supplies their own fabric (COM), the deposit policy shifts. You no longer need to cover fabric purchase, but you still need a booking deposit to hold the schedule slot. A flat booking deposit of $100-200 is standard for COM jobs. This amount is credited toward the final invoice.

Always inspect COM fabric before accepting it: check yardage, verify there are no defects, confirm the cleaning code, and note the fiber content. Document your inspection on the work order. If the customer provides insufficient yardage, document this immediately rather than discovering it mid-job.

Final Payment Timing

Final balance is due at pickup or delivery, not after. Never release completed work without payment. This is a non-negotiable policy for maintaining healthy cash flow and avoiding collection problems. Repeat customers who have a track record may be invoiced net-30, but this should be a deliberate decision, not a default.

Deposit Refund Policy

Your refund policy on deposits should be in writing on your quote, and customers should acknowledge it. A standard policy: deposits are non-refundable once materials have been ordered. If a customer cancels before materials are ordered, return the deposit minus a cancellation fee that covers your administrative time. If a customer cancels after materials arrive, retain the full deposit. It covers your material cost.

Using Software for Payment Tracking

Manual payment tracking through spreadsheets or written ledgers is a common source of errors in small upholstery shops: misposted deposits, forgotten final balances, and confusion about what has been invoiced versus collected. Shop management software like StitchDesk tracks deposit receipt, materials ordered, and balance due at each stage. The balance due is always current and visible without any manual reconciliation.