What progress billing is
Progress billing means invoicing a customer in stages over the life of a job rather than once at completion. Each invoice bills for the portion of work finished since the last one. It keeps money flowing in roughly in step with money going out — payroll, materials, subs — so the project funds itself instead of draining your reserves.
Three ways to structure it
1. Milestone / phase billing
You bill a set amount when a defined phase is complete — demo done, rough-in passed inspection, drywall hung. Clean and easy for clients to understand because each invoice maps to a visible result. Best for jobs with clear stages.
2. Draw schedule
Common on new builds and bank-financed work: a fixed schedule of draws (e.g. 10% at signing, 25% at framing, and so on) agreed up front. The lender or owner releases each draw as that stage is verified. Predictable, but you commit to the schedule early.
3. Percentage complete
You bill the percentage of the contract that's actually finished in the period — often tracked against a schedule of values. Most flexible for jobs that don't break neatly into phases, but it requires honest, defensible progress tracking.
| Method | Best for | Trade-off |
|---|---|---|
| Milestone | Remodels with clear stages | Lumpy cash flow between milestones |
| Draw schedule | New builds, financed jobs | Locked in early, less flexible |
| % complete | Long or continuous work | Needs solid progress tracking |
Retainage note: many contracts hold back 5–10% (retainage) until final completion. Whatever method you use, track retainage separately so your "paid" figures don't look complete when there's still a holdback to collect.
Where software earns its keep
Progress billing by hand is error-prone: you have to remember what you already billed, what's left, and what's being held back — per job, across every active project. Construction invoice software that supports progress billing tracks the billed-to-date and remaining balance for you, so each draw is accurate and nothing gets billed twice or forgotten. Pair it with a connected estimate-to-invoice flow and the schedule of values is already in place.
Frequently asked
How often should I send progress invoices?
Monthly is standard on longer jobs; milestone-based works for shorter ones. The key is a cadence both you and the client agreed to in writing before work starts.
What if the client disputes a draw?
Tie each invoice to documented, verifiable progress — photos, completed phases, or a signed schedule of values. Clear line items reduce disputes more than any amount of follow-up.