QuickBooks for Contractors Tip – Basics of Progress Invoicing

Progress Invoice created from EstimateProgress Invoicing is a standard feature of QuickBooks® Pro, Premier, and Enterprise editions; each of these versions also offer several options for invoicing as well.  In order to implement the Progress Invoicing function you must also utilize the QuickBooks Estimate function – this will eliminate repetitive data entry and help you achieve good job costing reports, such as Estimate vs. Actual reports.

To activate Progress billing you MUST first log into QuickBooks as the QuickBooks Administrator and be in single-user mode.  From the Edit menu -> choose Preferences -> scroll down to Jobs & Estimate -> and click on the Company Preferences tab.  Once you are in the Company Preferences tab, review and set the options as follows:

  • Do You Create Estimates – should be set to Yes
  • Do You Do Progress Invoicing – should be set to Yes
  • Warn about duplicate estimate numbers – should be checked (this will prevent you from creating two or more estimates for different jobs with the same estimate number)
  • Don’t print items that have zero amount – this option SHOULD NOT be checked (this allows you to display line items on a progress invoice even if you are not billing for them on the current invoice)
  • Click Ok to save the changes that you have made.

Jobs & Estimates - Company Preferences
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At this point, you can switch to multi-user mode so you and others can continue working.

Next, you’ll want to build your Estimate or Schedule of Values using the Job Cost Codes found in your QuickBooks item list.  You will want to make sure that you QuickBooks Items or Job Cost Codes are set up as double-sided items in order to capture both expenses and income.

Your Estimate can be as simple or as detailed as you like – bearing in mind that an Estimate with multiple lines will provide better job costing information than a single line Estimate with the full dollar amount.

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Once you have your Estimate in place and you are ready to create your first progressing billing or draw, you will go back to the Estimate you created and look for an option that says “Create Invoice” – click on that button/option.

This opens a Create Progress Invoice Based on Estimate window, which provides you with 3 different options for creating your progress invoice:

  • Create an invoice for the entire estimate (100%)
  • Create an invoice for a percentage of the entire estimate (you then get to choose a percentage – 33%, 30%, etc.)
  • Create invoice for selected items or for different percentages of each item.

Most construction contractors will choose the third option, to Create invoice for selected items or for different percentages of each item.  After making your selection on how you want to create the progress invoice; click OK.

create invoice from estimate
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This now opens a new window, Specify Invoice Amounts for Items on Estimate; where you will be able to see the various line items that are on your Estimate.  You can specify the quantity, rate, amount or percentage for each item that you wish to bill for in the current period.  As you enter amounts or percentages you will be able to see a running total for the current billing.  When you are satisfied, click the OK button to have the information automatically populate the Progress Invoice form.

specify amounts to invoice
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If you didn’t enter an amount or a percentage for each line item on your Estimate, QuickBooks will display a message indicating that there are items with zero amounts.

zero amount line items
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Most people will find this Zero Amount Items message to be very annoying; it can be turned off by checking the Do not display this message in the future and clicking Ok.

Following this procedure you have created your first basic progress invoice.  When you Save it, you have automatically updated your Accounts Receivable, and can send it to your customer or General Contractor or you can use the information it contains to complete an special invoice format that is required.

Progress Invoice created from Estimate
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11 thoughts on “QuickBooks for Contractors Tip – Basics of Progress Invoicing

  • Robert
    QuickBooks calls it an “Estimate” but there are templates that do say Proposal – it’s one in the same, just a difference in naming/wording.

  • Nelda Lopez

    Thank you for your reply. My clients want to know total construction costs, accumulated Profit and Overhead minus Hold Backs thus getting a total project cost – or the total of what they’ve paid. If the total column would reflect these amounts, we would be set, but no. My clients are getting more and more disappointed with QB and I would hate to see them migrate to another program.

  • Hi Nelda – have never been able to get the progress invoice to do what you want – you might be able to create a QuickBooks Letter that you could generate along with the Progress Invoice – you’d need to update the numbers much like you are now. It almost seems like the folks you are dealing with are looking for some sort of spin off of the AIA G-702/G-703 – maybe something like this – http://www.sunburstsoftwaresolutions.com/doc_download/377-g-702-invoice – either with or without the notary section???

  • Nelda Lopez

    I have a question for the construction industry. With all my clients, they want a total of the project with each progress invoice. In other words, they want a total for invoices #1-#5 for example. At present, I create an excel spreadsheet with the total contract amount, profit and hold back. I would like QB to provide me a running total in each progress invoice. Has anyone had any success with this? Thank you

  • Todd
    I believe that you are correct, QuickBooks on-line doesn’t have Progress Invoicing capabilities (which is a real shame).

    With a catering company I can see where progress invoicing would be really helpful – I bet like our construction customer you want at least deposit up front and the balance before the event (or perhaps more money just before the event and then the balance at another time).

    Have you considered having QuickBooks Desktop hosted?

    Having QuickBooks Desktop version (Pro, Premier, or Enterprise) would allow you to access all of the features/functions of the desktop version with the ease of accessing it from any location that you have with the On-line version.

    Take a look at this blog post https://blog.sunburstsoftwaresolutions.com/2010/04/30/using-a-service-to-host-quickbooks-and-other-software/

  • This is great o hear that this feature exists. One of my businesses is a full service catering company, and we would love to use progressive invoicing, because I would be using the feature with almost all of my clients. However I don’t believe you can do it with QB online. This would be great to have and I have provided this feedback several times. 🙁

  • This is an interesting topic. I’m always looking for great resources to share with clients and my coworkers, and your post is certainly worth sharing!

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