What is Progress invoicing?
Let’s take the scenario at the beginning of the blog. The contractor sent over the estimate and started working. The customer (building’s owner) chose to split the total amount into multiple payments. So, every time the contractor completed a stage, they would send an invoice to the customer for payment. It is called Progress Invoicing or Progress Billings.
Progress Invoicing is invoiced requesting payment for work completed to date. Progress Invoicing is prepared and submitted for payment at different stages of the project. It is common in projects lasting a long time.
The Progress Invoice usually includes the completed work up to date based on the original contract. However, it could also comprise other items or change orders that the owner and contractor agree to charge.
What is included in the Progress Invoice?
Because the Progress Invoice is generated from the estimate, it includes most of the information on the estimate relating to the contractor, the project’s owner information, or the project itself information. About the work, the Progress Invoice usually includes the completed work up to date based on the original contract. However, it could also comprise other items or change orders that the owner and contractor agree to charge.
Moreover, customers need to consider the payment term which could end up in a late payment charge.
If you need any advice or services on any aspects of construction bookkeeping, accounting or tax, our construction accounting specialists are ready to help. Get in touch with us for a free quote.
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