Calculate your result
Use figures from the same period and currency. Avoid mixing estimates with verified amounts without noting the difference.
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Why this matters
Under-depositing forces the business to finance the customer’s order. If the customer cancels or delays, the owner may be left with customized materials, committed labor and no cash recovery. The calculation helps decide the minimum upfront amount needed to cover nonrecoverable commitments and the chosen protection buffer. That distinction matters because a balance can appear as revenue or a receivable while the business still lacks spendable cash.
Use supplier quotes, pre-delivery labor, other non-refundable costs, the total customer price and a buffer supported by actual cancellation or collection experience. Reconcile the figure to the customer contract, invoices, credits and payments before relying on the result. Receivable guidance separates earned or billed revenue from cash actually collected. Contract terms, disputes, collectibility and local recovery law remain decisive. A calculator cannot determine whether an amount is legally due, collectible or properly recognized in the accounts.
How to act on the result
- Quote the deposit as a specific amount and due date rather than a vague percentage
- Collect cleared funds before ordering customized materials
- Review the deposit after any scope change that increases upfront exposure
Use the output to create a dated collection or deposit decision. Record who will contact the customer, what evidence will be sent, what payment method is available and what happens if the commitment is missed. The strongest process removes ambiguity and applies the same escalation logic consistently.
Common mistakes and limits
Avoid including profit as if it were a direct cost, charging more than the contract allows, ignoring card chargeback risk and failing to state refund conditions. The output is not a credit score, legal demand or expected-credit-loss calculation under IFRS 9 or U.S. GAAP. Those conclusions can require forward-looking data, accounting policy and professional judgment. Where local consumer law regulates deposits or cancellations, obtain legal guidance before describing any amount as non-refundable.
What this calculator answers
What deposit should be collected before work begins?
Formula and assumptions
Minimum deposit = upfront direct costs + cancellation exposure + desired protection buffer.
The result is an estimate. It is only as reliable as the inputs, and it does not account for every tax, legal, financing or operational consequence.
Worked-example method
Use the prefilled sample values, calculate once, then replace every input with numbers from your records. The result will show a risk level, key measurements and one recommended next move.
How to interpret the result
- Low: no immediate gap or the entered position is comparatively protected.
- Medium: manageable pressure exists, but it should receive a dated correction plan.
- High: the problem can materially damage cash or operations and requires near-term action.
- Critical: the entered assumptions indicate immediate loss, shortage or survival risk.
Authoritative references
Sources provide general business and operational context. The formula and result are decision-support estimates created by Business Rescue Tools.
Frequently asked questions
What does this calculator tell me?
What deposit should be collected before work begins?
How is the result calculated?
Minimum deposit = upfront direct costs + cancellation exposure + desired protection buffer.
Should I make a major decision from this result alone?
No. Use the result to identify and quantify a problem, then verify the underlying records, assumptions and local legal or accounting requirements.
Does the site store the figures I enter?
This browser-based calculator runs in your browser and does not submit the figures to our server.