On a three-month job, waiting for completion to invoice means paying for materials, wages and subcontractors yourself for three months. Builders and contractors use progress invoicing instead: interim invoices that match the real progress of the job. Done properly, they are easy to check and get paid without argument.
The principle
Instead of one invoice at the end, you issue regular invoices, for example at the end of each month or at each stage. Each one reflects the work actually completed since the start, minus what has already been invoiced.
Two ways to measure progress:
- by percentage per line: "partitions: 60% complete";
- by quantity: "partitions: 84 m² fitted out of 140 m²".
Quantities are easier to check; percentages are quicker for lump-sum items. Many contractors use both.
Set it up in the quote
The client must know in advance how they will be invoiced. State in the quote:
- how often progress invoices are issued: monthly or by stage;
- how progress is measured: percentage or quantities checked on site;
- the payment terms for each progress invoice;
- how the deposit is handled: deducted in one go or spread across invoices.
How to size the deposit is covered in our guide to asking for a deposit.
Worked example
A job worth 40,000 before tax, with an 8,000 deposit recovered in proportion to progress.
Progress invoice no. 2, end of month two:
| Quote line | Value | Cumulative progress | Completed to date |
|---|---|---|---|
| Strip-out | 4,000 | 100% | 4,000 |
| Services | 12,000 | 75% | 9,000 |
| Partitions | 10,000 | 40% | 4,000 |
| Floors | 8,000 | 0% | 0 |
| Decorating | 6,000 | 0% | 0 |
| Total completed to date | 17,000 |
Then the calculation:
| Calculation | Amount |
|---|---|
| Completed to date | 17,000 |
| Deposit recovered pro rata (17,000 / 40,000 × 8,000) | −3,400 |
| Progress invoice no. 1 already billed (net of deposit) | −6,800 |
| Progress invoice no. 2 (before tax) | 6,800 |
Amounts are before tax; apply your own tax rules. The benefit of working cumulatively: a mistake on one invoice corrects itself on the next.
Agree progress on site
The best protection against a dispute is progress checked together. Before each progress invoice:
- 1walk the site with the client or their representative;
- 2take dated photos;
- 3send the progress breakdown with the invoice.
A client who has seen the work move forward pays the invoice without fuss.
Extras during the job
Extra work goes onto progress invoices as separate lines, once the client has agreed in writing, as explained in our article on going from accepted quote to invoice. Keep extras apart from the original quote lines so the client sees what was in the original contract and what was added.
The final invoice
At completion, the final invoice shows the full contract value, any approved extras, and deducts all progress invoices and the deposit. It shows the balance still due. Every progress invoice is a real invoice, numbered in your normal sequence.
Common mistakes
A few slips cause most progress invoicing disputes. Invoicing progress that has not really happened, to ease your cash flow, destroys trust the moment the client checks. Forgetting to deduct the deposit makes the client think they are being charged twice. Mixing extras into original lines hides what changed. And issuing progress invoices irregularly makes them hard to follow. Keep to the agreed schedule, measure honestly and show every deduction.
When to use progress invoicing
| Job | Suitable? |
|---|---|
| A few days | No: deposit and final invoice are enough |
| Several weeks | Yes, by stage |
| Several months | Yes, monthly |
| Large commercial job | Yes, often required by the client |
For a simpler alternative on medium-length jobs, fixed stage payments may be enough: see our article on fixed price vs time and materials.