FFP Guides

ServiceM8 how-to

How do you take a deposit invoice in ServiceM8?

ServiceM8 handles deposits natively in two ways. The Partial/Progress Invoicing add-on (Starter plan and up) splits a deposit off the job as its own invoice. Deposits with ServiceM8 Pay ask the customer to pay a set percentage when they accept the quote, and the payment reaches Xero as a prepayment, per ServiceM8's help centre.

Last checked 25 Sep 2026 against the sources listed at the end of this page.

Yes, natively

Yes, natively: use a partial invoice for a deposit invoice, or ServiceM8 Pay to collect a deposit when the customer accepts the quote.

Step by step

  1. Partial invoice route: open the job and click Quotes & Invoicing.
  2. Click the arrow next to Produce Invoice, then New Partial Invoice. If the option is missing, turn on the Partial/Progress Invoicing add-on (Starter plan or higher).
  3. Click Add Material/Service and add a deposit line with the amount you want, then click Confirm Invoice.
  4. ServiceM8 creates a completed job with the original job number plus a letter. Send that invoice to the customer.
  5. If the customer has already paid, click Payment Received before Confirm Invoice and the document becomes a receipt.
  6. Go to Invoicing, Awaiting Approval, tick the deposit job and click Approve to send it to Xero.
  7. ServiceM8 Pay route: set up ServiceM8 Pay, then set a default deposit percentage under Account, Settings, Preferences, Quotes & Estimates.
  8. Override it per customer on the client card (Billing Details, Deposit Required) or per job (Billing, Customize Quote, Deposit Required).
  9. Check that the default account for payments in ServiceM8's Xero settings is a bank account, so the deposit posts to Xero as a prepayment.
  10. Send the quote. When the customer accepts and pays, the job moves to Work Order and the final invoice shows the remaining balance.

Gotchas

  • Turning on partial invoicing does not put a deposit line on your quote. A deposit shown at quote acceptance comes from the ServiceM8 Pay deposit setting. If you want the words '50% deposit' printed on the quote PDF, that is a document template change.
  • ServiceM8 Pay deposits on ordinary quotes are a percentage only. A fixed dollar deposit works in Proposals (enter it without a % sign), and Proposals need the Growing plan or higher. The mobile app takes percentages only.
  • If the default account for payments in the Xero settings is not a bank type account, Pay deposits do not sync to Xero as prepayments.
  • The Pay deposit stays as an unapplied credit in Xero until the job is Completed, the balance is paid and the invoice is approved. Tell your bookkeeper before they try to allocate it by hand.
  • Each partial invoice is a separate invoice in Xero. On Xero Ignite, which is capped at 20 invoices, invoices created by apps can count toward the cap, so deposits can push you over it sooner.
  • Delete or edit the deposit job carefully. The original job carries a negative partial invoice line; removing one without the other bills the customer the wrong amount.

What the official help article misses: It stops at Confirm Invoice. It does not say the deposit job still needs approving from Invoicing to reach Xero, does not name the plan the add-on needs, does not compare it with ServiceM8 Pay deposits, and says nothing about GST timing or Xero invoice caps. Read ServiceM8's article.

Two routes, and which one to pick

ServiceM8 gives you two native ways to take money up front, and they behave differently once Xero is connected.

A partial invoice is a real invoice for part of the job. You raise it from the job's Quotes & Invoicing screen, ServiceM8 creates a new completed job carrying the original job number plus a letter, and a negative line comes off the original job so the customer is not billed twice. Once you approve it, it goes to Xero like any other invoice. Use this when you want a tax invoice for the deposit, when the customer pays by bank transfer, or when you bill in progress claims on bigger jobs.

A ServiceM8 Pay deposit is a payment, not a separate invoice. You set a deposit percentage, and the customer is asked to pay it by card when they accept the quote online. The job moves from Quote to Work Order by itself once the deposit is paid. In Xero the money shows as a prepayment credit against the customer, which is applied when you approve the final invoice. Use this when you want the deposit to be the thing that books the job, with no chasing.

If you already use ServiceM8 Pay and your customers accept quotes online, the Pay route is less admin. If you need a document the customer can pay against, or your deposit is a fixed dollar amount on an ordinary quote, use the partial invoice.

What happens in Xero

A partial invoice arrives in Xero as its own invoice with its own number. The balance invoice arrives later, already reduced by the deposit. That means two invoices per job in Xero, which matters if you are on a Xero plan with an invoice cap (see the catches below).

A ServiceM8 Pay deposit arrives as a prepayment, usually within 30 minutes of the customer paying. It only posts correctly if your default account for payments in ServiceM8's Xero settings is a bank type account. The prepayment is not applied to anything until the job is Completed, the balance is paid and the invoice is approved to Xero. Until then it sits as a credit on the contact, which is correct, but it surprises bookkeepers who expect to see it against an invoice straight away.

The GST question

If you report GST on a non cash (accruals) basis, the ATO attributes GST to the period in which you issue an invoice or receive any payment, whichever comes first. So a deposit invoice in September puts that GST in September's BAS even if the job finishes in November. That is normal, but agree with your bookkeeper which route you use so deposits are not counted twice or missed. If you report on a cash basis, GST follows the payment date.

Sources

  1. A partial invoice for a deposit creates a new completed job numbered with the original job number followed by a letter, and adds a negative partial invoice item to the original job. ServiceM8 Help Center, checked 25 Sep 2026.
  2. On ServiceM8's Australian pricing, Partial/Progress Invoicing is included from the Starter plan up, and Proposals from the Growing plan up. ServiceM8, checked 25 Sep 2026.
  3. Deposits with ServiceM8 Pay are set as a percentage from 0% to 100% (a fixed amount is not supported on quotes), can be overridden per client and per job, and move the job from Quote to Work Order once paid. Proposals accept a percentage or a fixed amount. ServiceM8 Help Center, checked 25 Sep 2026.
  4. A ServiceM8 Pay deposit syncs to Xero as a prepayment credit against the client, typically within 30 minutes, only if the default account for payments is a bank type account. It is applied once the job is Completed, the balance is paid and the invoice is approved to Xero. ServiceM8 Help Center, checked 25 Sep 2026.
  5. Xero's Ignite plan points businesses sending more than 20 invoices to the Grow plan, and transactions initiated by app partners may count toward the Ignite invoice limit. Xero, checked 25 Sep 2026.
  6. On a non cash basis, GST on a sale is reported in the earlier period in which you issue an invoice or receive any of the payment. Australian Taxation Office, checked 25 Sep 2026.