Progress Billing
Definition
Progress billing is the practice of invoicing the customer in stages as work is completed on a long project, rather than waiting until the end.
What Progress Billing Means for Your Business
What it means
Progress billing breaks a big job into payment milestones. A $100,000 install might bill 30% on contract, 30% on rough-in, 30% on completion, and 10% on final punch list. Each milestone triggers an invoice.
Why it matters
Long jobs without progress billing crush cash flow. You are buying parts, paying labor, and waiting 60 days for one big check. Progress billing keeps the money moving and reduces financial exposure.
How contractors use it
The contract spells out the billing schedule. As each milestone is completed and signed off, the system generates and sends the next invoice automatically.
Real-World Example
A commercial HVAC contractor on a $680,000 install used 4-stage progress billing. They collected $204,000 at contract signing instead of carrying the project on a credit line, saving roughly $8,400 in interest.
Related Terms
Deposit Invoice
A deposit invoice is an initial bill that collects a portion of the total job cost before work begins, typically to cover materials and secure the customer's commitment.
Final Invoice
A final invoice is the last bill on a job, showing the total amount due after applying any deposits and progress payments already collected.
Net 30
Net 30 is a payment term that gives the customer 30 calendar days from the invoice date to pay the full amount due.
Invoice
An invoice is a billing document that lists the work performed, parts used, and total amount due from the customer.
Change Order
A change order is a written amendment to an existing contract that adjusts scope, price, or timeline after the work has started.
Put This Into Practice with Free Software
Kaldr Tech handles progress billing and everything else you need to run your shop. $0/month, 3.5% + 30¢ per transaction.