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. Completion Bond

    A financial contract that insures a given project will be completed ...
  2. Percentage Of Completion Method

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

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

    The planning and organization of an organization's resources ...
  5. Critical Path Analysis

    A project-management technique that lays out all the activities ...
  6. Project Completion Restriction

    A type of clause, seen most often in municipal bond indentures, ...
Related Articles
  1. Professionals

    10 Ways to Improve Cash Flow in Construction

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

    Revenue Recognition and Accounting Entries

    CFA Level 1 - Revenue Recognition and Accounting Entries. Step by step examples showcasing how to apply revenue recognition to accounting entries. Illustrates two methods of revenue recognition.
  3. Personal Finance

    Procrastinator's Guide To Bill Payment

    Avoid punishing late fees and keep your credit score intact with these 10 tips.
  4. 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.
  5. Economics

    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. Options & Futures

    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. Budgeting

    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. Savings

    Open Bills and Pay Them the Same Day

    Check out these 8 easy steps that can help you take the confusion out of your personal finances
  9. Professionals

    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.
  10. Personal Finance

    $1,000 Bill

    There are several denominations that the U.S. Treasury has discontinued. Here are the most notable ones.
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. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center