Proposals · Glossary
What is a progress invoice?
A progress invoice bills a portion of a larger job as each stage is completed, rather than charging everything at the end. Each one shows the stage or percentage completed, the amount for that stage, amounts already invoiced and the balance remaining, so the client pays in step with the work.
Long jobs strain cash flow if the business waits until the end to be paid. Progress invoices spread the payments across the work, and they make the remaining balance visible to both sides at every stage.
Nuwan Madhusanka · Co-founder
4 min read · Published
How progress billing works
The contract or proposal breaks the price into stages, such as design, build and launch for a website, or base, frame, lock up and completion for a house. When a stage is finished, the business issues a progress invoice for that stage's share. Each invoice usually shows the contract total, the work completed to date, what has been invoiced before, the amount due now and what is left. The final invoice charges the last stage and any approved variations, closing out the balance.
Progress invoices and progress claims
In Australian construction, a progress payment request is often called a progress claim, and the security of payment legislation in each state gives contractors a statutory right to make one and sets strict timelines for the response. Under the Victorian Building and Construction Industry Security of Payment Act 2002, for example, a claim must meet the form requirements of the Act to trigger those rights. Outside construction, progress invoicing has no special statute; it is simply a payment schedule agreed in the contract.
Milestones or percentages
Progress can be measured by milestones, where a stage is either complete or not, or by percentage complete, where the business estimates how much of the work is done. Milestones are easier to verify and suit services and smaller builds. Percentage billing suits long jobs with continuous work but needs a fair method of measuring progress, which is a common source of disputes. Whichever is used, the proposal should define it before work starts.
Common mistakes
Invoicing a stage before it is genuinely complete invites a dispute and a delayed payment. Failing to show amounts already paid makes each invoice look like a new debt. Mixing variations into stage amounts hides why the total changed. And skipping the statutory form requirements in construction can cost a contractor the protection of the security of payment process.
Where it shows up in the product
Invoices are created and edited in their own editor, numbered in the INV-0001 style, and a Create invoice action in the Pricing panel converts a proposal's items into an invoice. A draft invoice can have its money edited, so a stage can be billed by editing a draft to the items of that stage. The automatic invoices at acceptance cover a deposit and a balance; there are no recurring invoices or automatic stage schedules, so further progress invoices are created by hand.
Questions people ask
What is the difference between a progress invoice and a deposit invoice?
A deposit invoice asks for money before work starts, to secure the booking and cover early costs. A progress invoice charges for work already completed at a stage. A job can use both: a deposit on acceptance, progress invoices at each stage, and a final invoice for the balance, each one reducing the amount still owing.
How many progress invoices should a job have?
Enough to keep payments roughly in step with your costs, usually three to five for a project of a few months. Too many stages create admin for both sides; too few leave you funding the work. Tie each stage to something the client can see, such as a delivered draft or a completed frame.
Is a progress invoice a tax invoice?
If you are registered for GST and the progress invoice charges for part of a taxable supply, it should meet the tax invoice requirements: your ABN, the date, a description, the GST amount and, for amounts of 1,000 dollars or more, the buyer's identity or ABN. Each progress invoice then carries the GST for its stage.
What happens if the client disputes a stage?
Check what the contract says completes the stage and show the evidence, such as photos, a delivered file or an inspection. In construction, the security of payment process has strict timelines for responding to a claim. Outside construction, resolve it by discussion, then mediation, and keep invoicing undisputed work.
Can I use percentage complete for small jobs?
You can, but milestones are usually clearer for small jobs because they are easy to verify. Percentage complete suits long jobs where the work progresses continuously and the client trusts your estimate or has a way to check it, such as a quantity surveyor's report.
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Create a proposal with OneCraftRelated questions
- What is a deposit invoice?What is a deposit invoice? An invoice for an upfront part payment before work starts: how to set the amount, what it shows and how the balance follows.
- What is a payment schedule?A payment schedule sets out when money moves and what has to happen first. Milestone, time based and retention schedules, with a worked six milestone example.
- What does net 30 mean on an invoice?What does net 30 mean? The full invoice amount is due 30 days after the invoice date. How net terms work, variants like 2/10 net 30, and when to use them.
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