Progress Billing

What is progress billing?

Progress billing means invoicing a client for the portion of work completed so far on a longer project. Instead of waiting months to send a single invoice, you bill at set stages, such as when framing is done or when a phase of a design project is approved.

For contractors, progress billing keeps cash flow steady and reduces the risk of covering large material and labour costs out of pocket.

How progress billing works

A typical progress billing setup includes:

• Agreed schedule: The contract defines billing stages, either by milestone or by percentage complete
• Stage invoices: Each invoice covers work completed since the last one, often shown as line items per phase
• Running balance: Each invoice shows the contract total, amounts already billed, and the remaining balance due
• Holdbacks: Some clients hold back a percentage of each payment as retainage until the job is complete
• Adjustments: Approved change orders are added to the contract total and billed in later stages

Progress billing vs. deposits

A deposit is collected before work starts. Progress billing happens during the project as work is delivered. Many contractors use both: a deposit to secure the job and cover materials, then progress invoices through to completion.