Use a deposit when you want money before you've invoiced anything. Use milestones when you know the full invoice now and want your customer to pay it in stages.
How a deposit works
A deposit request is a payment link for an amount you choose, paid before any invoice exists.
Your customer pays it by card or bank debit only.
The money waits as an unapplied payment until you put it on an invoice. QuickBooks Online and Shopify see it only then.
The invoice you issue later has its own number and total, and the deposit counts toward it.
To set one up, see take a deposit before you issue an invoice.
How milestones work
The full invoice is created up front, with one invoice number and one total.
You split the total into stages, each with its own issue date and payment term.
Each stage is issued and emailed on its date, and reminders follow its due date. Issuing a stage early with Issue doesn't email it.
At checkout your customer pays the stages issued so far, or picks Total balance to pay the whole invoice. Paying it all issues the remaining stages without emailing them.
To set them up, see split an invoice into milestones.
When a deposit fits better
The amount could still change, such as on a quote.
You want money before you build the invoice, or before work starts.
You'd rather not commit to an invoice total until the work is done.
When milestones fit better
The price is agreed, and you want one invoice for all the work.
The customer pays in set stages, like half now and half on delivery.
You want each stage to have its own due date and reminders, without issuing separate invoices.
Who can use this feature?
Team members with Deposits access, for deposits
Team members with Invoices access, for milestones
Available on Scale and Enterprise plans