Progress Billings

What are 'Progress Billings'

Progress billings are a series of invoices prepared at different stages in the process of a major project, in order to seek payment for the percentage of work that has been completed so far. Progress billing will show the original contract amount, any changes to that amount, how much has been paid to date, what percentage of the job has been completed to date, what payment is currently due and the total amount remaining to be paid by the project's completion. Progress billing is common in the construction industry.

BREAKING DOWN 'Progress Billings'

For example, in the construction business, the client or recipient of the finished project does not want to pay for the entire job up front because it is an expensive, long-term task with the potential for many financial miscalculations along the way. The construction company does not want to wait to be paid until the project is completed because it needs to pay its employees and purchase materials as the project is carried out.





Progress billings meets the needs of both the construction company and its client by providing for payment at several stages during the process.



RELATED TERMS
  1. Percentage Of Completion Method

    An accounting method in which the revenues and expenses of long-term ...
  2. Cycle Billing

    The practice of billing different customers based on a scheduled ...
  3. Project Management

    The planning and organization of an organization's resources ...
  4. Project Completion Restriction

    A type of clause, seen most often in municipal bond indentures, ...
  5. Critical Path Analysis

    A project-management technique that lays out all the activities ...
  6. Invoice

    A commercial document that itemizes a transaction between a buyer ...
Related Articles
  1. Markets

    10 Ways to Improve Cash Flow in Construction

    Improving cash flow in construction requires some sector-specific strategies.
  2. Personal Finance

    Procrastinator's Guide To Bill Payment

    Avoid punishing late fees and keep your credit score intact with these 10 tips.
  3. Professionals

    What Exactly Do Project Managers Do?

    While supervision is one important part of the job, a lot more goes into project management than just watching everyone work.
  4. Investing

    Work In Progress (WIP)

    Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.
  5. Investing

    What's an Invoice?

    An invoice is a document that itemizes a transaction between a buyer and a seller. Invoices can also be called bills or statements.
  6. Investing

    Automating Your Bill Payments

    Automation can be a painless (and free) way to remove the stress of bill scheduling from your life - if you do it right.
  7. Personal Finance

    Should You Pay Your Bills On Autopilot?

    Now that you can sign up to have your bills paid automatically online, it it a smart way to make your life more efficient? A look at the pros and cons.
  8. Managing Wealth

    Project Manager: Career Path & Qualifications

    Learn more about what project managers job, the qualifications necessary for the position and the most common careers for these professionals.
  9. Managing Wealth

    Project Manager: Job Description & Average Salary

    Discover more about the specific tasks that project managers are responsible for and the average salary that can be expected in such a position.
  10. ETFs & Mutual Funds

    What is Accrued Income?

    In a mutual fund, accrued income is earnings that have accumulated over the year, but have not yet been paid out to shareholders.
RELATED FAQS
  1. How can I calculate funds from operation in Excel?

    Understand how the terms ''work in progress'' and ''work in process'' are used interchangeably to refer to items in the middle ... Read Answer >>
  2. What are the differences between percentage of completion and the completed contract ...

    Learn the advantages and disadvantages businesses face when using either the percentage-of-completion or completed contract ... Read Answer >>
  3. How is work in progress (WIP) typically measured in accounting?

    Understand what work in progress is and why a company would have this on its financials. Learn how work in progress is typically ... Read Answer >>
  4. Why is a bank guarantee important in a long-term project contract?

    Understand what a bank guarantee is and learn why it is so important to the risk and safety of a long-term project contract Read Answer >>
  5. Who uses bills of exchange?

    Find out who uses bills of exchange, why they are important in international trade and what happens when a bill is traded ... Read Answer >>
  6. How do companies calculate the estimated duration of a new project?

    Learn about some of the common methods used by companies to estimate the duration of a new project, including those with ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center