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How to Create & Apply a Deposit Invoice or Prepayment for a T&M Project

Learn how to create a deposit invoice for a T&M project and apply it to invoices as hours and expenses are billed

Published: 1 June 2026

Audience

  • Admin

  • Controller

  • Project Manager

Objective

This article explains how to create a deposit invoice for a Time & Materials (T&M) project in PSOhub and how to apply the prepayment to invoices as hours and expenses are billed. Deposit invoices help secure upfront payment before project work begins.

Prerequisites

Eligible access
        You must have Admin, Controller, or Project Manager access in PSOhub.

Time & Materials project
        A T&M project must already exist in PSOhub.

Steps

  1. Open the T&M project in the Financials tab.
  2. Click + button to create a new contract line.
  3. Select Fixed Fee from the pop-up menu. The Contract Line details open.
  4. Name the contract line Deposit.
  5. Enter the deposit amount in the Amount field under Financials in the left-hand pane. 
  6. Set the other Financials fields to $0, as the deposit is not linked to a specific portion of work.
  7. Select Manual under Invoice Method in the right-hand pane. 
  8. Click Save.
  9. Navigate to the Invoices tab of the project. 
  10. Click + Create Invoice.
  11. Select the Deposit contract line.
  12. Click Create Invoice to generate the invoice. Click Close when complete.
  13. Review the invoice, approve it, and send it to the client for payment.

📌 Note: As the project progresses, your team books hours and expenses against the T&M          contract lines as normal. Continue managing the project until you are ready to invoice            for billable activity.

⚠️ Important: When you are ready to invoice for billable hours and expenses, apply the             deposit by setting its amount to zero. This causes the deposit to appear as a negative             amount on the next invoice, offsetting the total.

    Result

    The deposit is deducted from the invoice total as a negative line item. For example, if your team has booked $4,075 in time and expenses and a $2,000 deposit is applied to the same invoice, the total owed by the client is reduced to $2,075.

    💡 Tip: You have full flexibility over when to apply the deposit. It can be applied at any                  point during the project based on the agreed payment schedule with your client. To                  exclude the deposit from a specific invoice, leave the Deposit contract line unselected            when creating that invoice.

    Next Steps

    ✅ Create a deposit invoice for a Fixed Fee project
    Learn how the same deposit approach works for Fixed Fee projects with deliverable-based billing. How to Create & Apply a Prepayment for a Fixed Fee Project in PSOhub

    ✅ Send and manage invoices
    Review, approve, and send invoices to your customers directly from PSOhub.
    Invoicing in PSOhub

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