Progress Billing
A method of invoicing where a contractor or supplier bills for work completed to date at regular intervals throughout a project, rather than raising a single invoice at completion. Keeps cash flowing and reduces financial exposure on long-running jobs.
Progress billing is a method of invoicing where work completed to date is billed at set intervals throughout a project, rather than raising a single invoice at completion. A contractor or service provider assesses how much of the total contract value has been completed and issues an invoice for that proportion, minus any amounts already billed. This approach is standard in construction, AV system integration, commercial fit-out, and any project-based business where costs accumulate continuously over weeks or months.
The calculation is straightforward: if a $120,000 contract is 40% complete and $30,000 has already been invoiced, the next progress bill is $48,000 (40% of $120,000) minus the $30,000 already billed, giving $18,000 due. In practice, values are typically verified by a quantity surveyor, contracts manager, or client representative before each invoice is raised to prevent disputes over the percentage claimed.
Progress Billing vs. Stage Payment
Stage payment and progress billing are closely related but differ in how billing is triggered. A stage payment is triggered by a defined milestone event - "equipment delivered and installed," "commissioning signed off," "roof complete." Progress billing can follow the same milestone logic, but it can also reflect a percentage of completion assessed at a regular interval (monthly, for example) regardless of whether a named milestone has been reached.
Many contracts combine both approaches. A monthly valuation cycle sets the billing rhythm, while specific payments are locked to defined completion events such as practical completion or final commissioning sign-off. Understanding which applies to a given contract prevents billing errors and protects cash flow at each stage.
WIP connection
Works in Progress (WIP) describes the value of costs incurred on active jobs that have not yet been invoiced. Progress billing is the primary tool for converting WIP into revenue. Consistent billing at agreed intervals keeps WIP at manageable levels and reduces the risk of a large uninvoiced cost accumulation at project end.
Why Progress Billing Requires Discipline to Work
For progress billing to protect cash flow, three conditions need to be in place. The billing schedule must be agreed in writing before work starts - either by calendar date or defined completion percentage. Invoices must be raised promptly at each trigger point, not batched and sent weeks later. And actual costs already incurred must be reconciled before each invoice goes out, so the amount claimed reflects real completed work rather than an optimistic estimate.
Overbilling vs. underbilling
Claiming a higher completion percentage than is genuinely achieved creates overbilling - the business owes the customer future work it has already been paid for. Underbilling is the reverse: costs incurred but not yet billed, tying up cash unnecessarily. Both create accounting complications and erode customer trust if discovered during a contract review.
Zigaflow captures job costs against milestones in real time, so when a progress billing trigger is reached the actual cost picture is already visible. Invoices link directly to job records, giving the billing team accurate data to support each claim without manual reconciliation.
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