Take a deposit that covers everything you will spend before the next payment, collect the balance before the event, and write down from day one what happens if the client cancels. A caterer buys food, books rentals and confirms staff days before the party. If the client pays everything at the end, you are funding their event with your money, and if they cancel, you are left with the waste and the rental bill.
What the deposit has to cover
A deposit is not a percentage you copy from another caterer. It is the money you need so you never pay out of your own pocket. List the event's costs by date:
- On booking: the rental company's deposit for plates and chafing dishes, and the date you can no longer sell to someone else.
- One to two weeks out: dry goods (flour, oil, rice, soft drinks, disposables).
- One week out: you confirm servers and your kitchen assistant; from then on you owe them even if the event is cancelled, depending on what you agreed.
- Two or three days out: perishables (meat, fish, dairy, salad) and prep starts.
- At the end: the rental balance, the van, the gas.
Each payment from the client has to arrive before each block of spending, and be big enough to cover it. Your own records are the best guide here: look back at your last few events and note the day each cost actually went out.
Three payments, three dates
A simple structure:
- Deposit on booking, covering what you spend until a week out.
- Second payment a week out, covering staff and perishables.
- Balance two days before the event, covering the rest and your margin.
Taking the balance before the event is how you avoid funding someone else's party. Leave it until afterwards and you are extending credit; the guide on credit terms shows what that costs.
Worked example: a 40-guest birthday dinner
A 40th birthday dinner, 40 guests at $65 a head: $2,600 in total. Your costs for the event:
| Cost | When | Amount |
|---|---|---|
| Rental deposit | On booking | $150 |
| Dry goods and drinks | 10 days out | $350 |
| Staff (servers and assistant) | 7 days out | $480 |
| Perishables | 3 days out | $650 |
| Rental balance | Event day | $150 |
| Van | Event day | $80 |
| Gas and sundries | Event day | $90 |
| Total | $1,950 |
Your margin: 2,600 − 1,950 = $650.
Payment plan:
- Deposit, 30% on booking: 2,600 × 0.30 = $780
- Second payment, 40% seven days out: 2,600 × 0.40 = $1,040
- Balance, 30% two days out: $780
Check that each payment covers what you spend until the next one:
- Up to seven days out you spend 150 + 350 = $500. You hold $780. Covered.
- Up to two days out you also spend 480 + 650. Running total: 500 + 1,130 = $1,630. You hold 780 + 1,040 = $1,820. Covered.
- On the day you spend another 150 + 80 + 90 = $320. Total $1,950, and you have already collected $2,600.
At no point is your own money in the event. If your costs land in a different order, change the percentages; the method stays the same.
The cancellation scale
Write it into the quote with real dates. For the example:
| If they cancel | Already spent or committed | What you keep |
|---|---|---|
| More than 30 days out | $150 rental deposit | $250 (rental + $100 for the date); refund $530 |
| 30 to 8 days out | Rental and, near the end, dry goods | The full deposit, $780 |
| 7 days out or less | Staff and perishables | The first two payments, $1,820 |
The logic is simple: you keep what you have spent and cannot recover, plus something for a date you can no longer sell. With less than a week to go, filling that date with another event is unlikely.
Consumer rules on deposits and refunds vary by place. If you are unsure, check your local consumer rules or ask a lawyer before you put the scale into your terms.
The guest count has a deadline too
The client confirms the final number on a fixed date, for example with the second payment. After that, the number can go up if you still have time to shop, but if it goes down, you charge the confirmed number: you have already bought for it. Put this right next to the cancellation scale.
Put the dates in your cash forecast
Every confirmed event has three payments in and several costs out, each with a date. Put them in your cash flow forecast: with two or three events in the same month you will see whether a payment lands too late for a big shop. For the rest of the quote, the catering and events guide brings all the pieces together, from the client tasting to the final balance.
Do it with the calculator
Build the full cost of the event from your recipes in the food cost calculator; with that total and the price, you know how much of the payment you need on each date.
Frequently asked questions
What percentage deposit should a caterer take?
Enough to cover what you will spend before the next payment. Add up what you buy and book between signing and that payment, and ask for at least that, plus something for holding the date.
Should I refund the deposit if the client cancels?
It depends on when they cancel and what you have already spent. Write the cancellation scale into the quote before you take any money, so the client knows it from the start.
Can I take the final payment after the event?
You can, but then you are giving the client credit and paying for the food and staff yourself in the meantime. Taking the balance before the event is the safer habit.
Is a deposit taxable when I receive it?
When to record a deposit for tax depends on where you work and how your business is set up. Check your local tax rules or ask an accountant.