Many publishing service providers fear that even the word “deposit” paints them as angry bulldogs ready to bite the next client who tries to stiff them. Deposits do provide a small measure of protection against deadbeat clients, but they’re even better at creating business benefits for professionals and clients alike.

Deposits can take the lumps and bumps out of your income, make payments more affordable to clients, and create scheduling incentives that make your calendar smooth like butter. And that’s just the beginning.

The benefits of deposits

What can deposits do for your business?

  • Deposits guarantee that you won’t be completely empty-handed if the client goes AWOL or misses the project date, leaving you with open time on your calendar.
  • Deposits simplify scheduling requests: first deposit in hand gets the slot.
  • Deposits distribute your income more broadly over time, giving you a more consistent income stream
  • Deposits put a little something in your pocket in case a client skips out on other payments.
  • Deposits help cover subcontracting costs you may already have incurred if a client skips out on the final bill.
  • Deposits help build a predictable work stream by motivating clients to book well in advance and then stick to schedule. This can be especially important if your client list includes multiple series authors.

Deposits provide benefits for clients, too.

  • Deposits motivate clients to stay on deadline. There’s nothing like the risk of losing a nonrefundable deposit (on top of their service dates, no less) to keep someone pressing toward a project deadline.
  • Deposits spread out payments over time, creating a natural payment plan clients may find more affordable.
  • Deposits keep clients invested in the project. They’re less likely to go AWOL if they’ve already paid something in.
  • Deposits motivate clients to get serious about long-term goals and deadlines.

How much is enough?

The trick to making deposits achieve all these goals is to find the deposit amount that works for your clients. Many publishing industry pros require 50 percent up front. This isn’t an unusually high amount, especially for new clients, but be prepared for the occasional pushback from clients who want to know why they have to pay for something they haven’t yet received.

Other providers are comfortable with deposits of 25 percent or less.

You don’t have to use the same deposit policy or amount with every client. One frequent strategy starts with 50 percent up front for new clients, then drops to 25 percent or no deposit at all once a business relationship has been established.

How low can you go? A recent conversation among a group of professional editors concluded that the lowest flat-rate deposit that still incentivizes clients is somewhere between $150 and $300. Below that, you’re looking at deposit totals many clients may not balk at giving up if their plans no longer fit your schedule.

High deposits work best if you’re most concerned about getting stiffed—“left at the altar” with your time spent, the work complete, and no payment in hand. (A smart contract or letter of agreement can help you avoid that situation, but that’s another article.)

Moderate deposits get the job done if your goal is smoothing the payment curve for clients and the income stream for you.

Low deposits help prioritize scheduling requests and give clients that little kick of incentive without burdening their budgets.

The nonrefundable advantage

Deposits work so well because they’re nonrefundable. If clients change their minds, go missing, fall off schedule, or anything else that leaves your precious calendar time flapping in the breeze, they forfeit their money. This risk hopefully makes clients think twice about booking time they’re not sure they’re going to use.

That’s not to say that deposit money is strictly a scheduling fee. Most providers apply deposits to the last payment for the project. That way, clients get their money’s worth, but not until you’ve been paid for the rest of the work first.

It’s your prerogative to be as flexible and compassionate as you like when extenuating circumstances arise. If your schedule is consistently full, you may not ever need to rely on a deposit to cushion your income in the case of a missed or dropped project. If a client can’t meet their schedule, simply trade slots with another client who’d appreciate going sooner—no harm, no foul. Or roll the edit and deposit forward to a future date, if you’re confident you can fill the slot (or if you’d appreciate a little breathing room).

What about refunds?

It’s possible to get yourself in too deep financially if you accept large deposits or schedule far in advance. If you need to cancel one or more projects from your end—if you get seriously ill or are otherwise unable to work—it’s only right to return client deposits. That could mean returning a significant amount of money—and if you’ve long since spent those deposits you took in six months ago, you could be in for some real trouble.

If you use PayPal or similar services to accept payments, you could also be vulnerable to refund requests and disputes. Disputes have been known to be initiated by the seemingly nicest clients. Many services are legally able to pull money from your checking account (or whatever bank account you’ve associated with your payment service account) in order to issue a refund according to their policies. The usual advice applies: read the terms of service of any payment service you use, and understand what you’re liable for.

The best protection against unexpected refunds is avoid treating deposits like income. Hold them in a contingency fund until work has actually begun. It’s a good idea to maintain a strong emergency fund, anyway. Aim for enough money to cover one or more months’ worth of income, or the typical total of all the deposits you currently have booked, or whatever other financial metric keeps you sleeping through the night. Then link the payment services you use to that money, not your personal financial accounts.

One last element to think through now is how you would physically execute a refund. If the client doesn’t accept electronic payment, will you send a cashier’s check? Will you write a personal check that includes your personal address and information? If you write a personal check, will it drive you crazy if the client doesn’t present it promptly for payment? Working out the mechanics now will save you from stressful surprises when the situation does arise.

It’s just business

There’s no need to apologize for asking for a deposit. It’s a common business practice across many, many industries. You’re not rocking any boats or raising any eyebrows. Anyone who can’t or won’t pay a routine deposit is a problem client you don’t need on your client list.

Keep business matters brief and friendly but professional: “If you’d like to book me for a project, just let me know. I’ll send you my standard agreement and an invoice for [your deposit amount] as a deposit.” If you book up quite a bit in advance, you may prefer to tell clients you’ll work out a mutually agreeable schedule first and then send the agreement and deposit invoice.

Once you get your deposit policy up and rolling, stay open to tweaking it on the fly—but don’t drop out based on so far, so good. Hopefully, you’ll never need to rely on a deposit to save your bacon from a flaky client, but the moment you let down your protection is almost certainly the moment fate will slip you a trickster.