Progress billing for contractors: how to bill as you go without the spreadsheet mess
If you wait until the end of a job to invoice, you are financing your customer’s project with your own cash. Progress billing fixes that: you bill as work completes, against the original quote, so money arrives while the job is still moving.
How progress billing works
- Start with one quote. The total contract price, broken into line items. This is your schedule of values in simple form.
- Bill percent complete. Each billing cycle, you invoice for the work actually done - say 30% of the flooring line, all of demo. One quote carries as many invoices as the job needs.
- Track what is left. Every invoice draws down the remaining balance on the quote. At any moment you should be able to answer three questions: what is quoted, what is invoiced, what is outstanding.
- Handle retainage if your contract has it. Some jobs hold back 5-10% until completion. Track it as its own number so the final invoice is not a surprise to anyone.
Why contractors avoid it (and pay for it)
Most small GCs know they should bill progress. They do not, because the usual way of doing it is a spreadsheet that tracks percent complete per line, cross-referenced against the quote, reconciled against what was already invoiced. One missed formula and you have double-billed a customer or left money on the table. So they default to “50% up front, 50% at the end” and eat the cash-flow gap in the middle.
The controls that keep it honest
Progress billing only works if the numbers behind it hold up:
- Approved before billed. Nothing becomes billable until someone with authority signs off. In IQ Builders, vendor bills and manager counts get approved before they can hit an invoice.
- Discrepancies flagged, not discovered. If the field manager’s installed count and the vendor’s billed count disagree, you want that flagged before the check goes out, not at reconciliation.
- A paper trail on everything. Who made the change, who approved it, when. When a customer questions invoice four of seven, the audit trail is the answer.
What it looks like in practice
A $120,000 renovation, quoted once in IQ Builders. Month one: demo and framing complete - invoice 25% from the same screen the quote lives in. The customer approves online. Month two: rough-ins and drywall - another 30%. The dashboard shows quoted, invoiced, approved, and outstanding on one line. No spreadsheet, no reconciliation weekend, and the bookkeeper gets numbers that already add up.
The short version
Quote once, bill percent complete against that quote, keep approval and audit controls on everything billable, and never let the tracking live in a spreadsheet only one person understands.
Try IQ Builders free - run your next job’s progress billing from the quote, not a spreadsheet.