Down Payment – What is a down payment?
A down payment is a sum of money that a client pays to a business, when the business has already completed a portion of a service or provided a good.When your client pays you a deposit, it is necessary to save it on your invoice.
Features or Characteristics of Down payment
A down payment implies not only a commitment on the part of the customer, but also of the seller. That is, the customer agrees to pay for the product or service. And the seller agrees to provide the product or service.This is an initial partial payment on the amount of the invoice. An advance payment is made after the conclusion of the contract of sale.
What is the difference between a down payment and a deposit?
Deposits and Down Payments are different. When a client makes a down payment, that is, a partial payment, he can give up buying the good or service. In this case, the client will have lost the money he has paid.
Tattoo parlors, for example, sometimes require the payment of a deposit. Because if the tattoo artist spends time working on a project, and eventually the customer goes through, he will have lost time and money! If the client has paid a deposit and decides not to get tattooed, the tattooist will at least have some compensation for the time spent working on the project.
On the contrary, in the case of the Deposit, if the seller does not deliver the promised service or property, he may have to pay damages. And vice versa. If the client refuses to pay, the customer is liable for payment of damages. Impossible therefore to change your mind!