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An Introduction to Progress Invoicing

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Progress Invoicing (also called progress billing, percentage of completion billing, or partial billing) involves billing from an estimate (or Schedule of Values) over the course of time and could be considered a type of installment billing.  Progress billing is commonly associated with the construction industry; however, it is common in other industries as well.

progress invoicingQuickBooks® Pro, Premier, and Enterprise editions all offer several options for invoicing and a Progress Invoicing function is also available.

Some projects or jobs will require only a single invoice, others will require two invoices, others may require three invoices (one at the start of the job, one when you are 50% done, and the other when you are finished), other projects might require that you submit monthly progress invoices over the course of months or even years.

Typically, if you take on a job that you will have finished at the end of 30 days, you might only want to create a single invoice, unless retention or retainage is held for some reason, in which case you will have to create two invoices.

When your scope of work on the project will span one or more months, then you will want to consider progress billing.  When you generate progress billings, you will bill ONLY for the work that you have completed and the materials that you have used or installed – occasionally you will also be allowed to bill for materials that you have at the jobsite but have not yet used.

If you are a subcontractor, sometimes the General Contractor will have a form that they insist you use (instead of your own invoice form), other times they may insist that you submit your progress billing on an industry standard billing form – such as the AIA G-702 & G-703 forms developed by the American Institute of Architects – or similar plain paper forms containing the same information.

Make sure that you submit your billings on the forms that they want or they will probably reject your invoice; mail it back to you and tell you to resubmit your billing CORRECTLY.  Usually having to resubmit a bill means that you have to wait until next month to submit the corrected bill.

Always try to get your invoice paperwork right the first time and include any proper releases that are required.  Sometimes the General Contractor will hold up everyone’s invoices —-even if only one contractor has submitted their billing incorrectly.

4 Responses to An Introduction to Progress Invoicing

    About Your Host:

    Nancy Smyth, Certified QuickBooks ProAdvisor

    Nancy Smyth, Sunburst Software Solutions, Inc.
    QuickBooks Construction & Payroll Expert

    I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

    QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

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