Progress Billings

AAA

DEFINITION of 'Progress Billings'

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.

INVESTOPEDIA EXPLAINS '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. Pro-Forma Invoice

    A preliminary bill of sale sent to buyers in advance of a shipment ...
  2. Invoice

    A commercial document that itemizes a transaction between a buyer ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to ...
  4. Accounts Receivable - AR

    Money owed by customers (individuals or corporations) to another ...
  5. Cash Discount

    An incentive that a seller offers to a buyer in return for paying ...
  6. Occupational Safety And Health ...

    Law passed in 1970 to encourage safer workplace conditions in ...
Related Articles
  1. Entrepreneurship

    Small Business: Speed Up Receivables To Avoid A Cash Crunch

    Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
  2. Fundamental Analysis

    Understanding Pro-Forma Earnings

    These figures can either shed light on a company's performance or skew it. Find out why.
  3. Retirement

    The Essentials Of Corporate Cash Flow

    Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.
  4. Markets

    Operating Cash Flow: Better Than Net Income?

    Differences between accrual accounting and cash flows show why net income is easier to manipulate.
  5. Professionals

    Financial History: The Evolution Of Accounting

    Follow accounting from its roots in ancient times to the profession we now depend on.
  6. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  7. Mergers are not the same as acquisitions.
    Investing

    What's a Merger?

    Mergers are not the same as acquisitions. In an acquisition, one company buys and subsumes another company, leaving only the buyer in place. In most mergers, both companies merge to form an entirely ...
  8. Active Trading Fundamentals

    What is liquidity risk?

    Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk.
  9. Technical Indicators

    What is a good gearing ratio?

    Understand the meaning of the gearing ratio, how it is calculated, the definition of high and low gearing, and how they reflect relative financial stability.
  10. Fundamental Analysis

    What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center