Progress Billing for Construction

Stop Floating Your Projects Out of Pocket

Progress billing in construction is the difference between a healthy business and one that’s always scrambling for cash. If you’re waiting until the end of a job to bill your client, you’re basically giving them a free loan. And last time we checked, you’re a contractor, not a bank.

Projul’s progress billing lets contractors invoice at every project milestone instead of waiting until the job is done. Build invoices from estimates, set custom payment schedules, and track every payment in one place. Projul offers flat-rate pricing with no per-user fees for construction companies of all sizes.

Projul makes it easy to collect deposit invoices that cover material purchases and early labor costs on your jobs. Over 5,000 contractors use Projul to keep cash flowing from day one. With construction progress payments built into your workflow, you’ll stop wondering when you’re getting paid and start focusing on the work.

How Progress Billing Actually Works

If you’ve never set up progress billing before, or you’ve been doing it with spreadsheets and handshake agreements, here’s how it works when you do it right.

Step 1: Break the Project into Phases

Before the job starts, you and your client agree on the project phases and what each one costs. This usually maps to your estimate. For a kitchen remodel, that might look like demo, rough-in, cabinets, countertops, and final finishes.

Step 2: Set Your Billing Schedule

Decide when you’ll bill for each phase. Some contractors bill when a phase is complete. Others bill on a set schedule, like the 1st and 15th. In Projul, you can set this up however you want and even front-load a deposit invoice to cover materials.

Step 3: Complete the Work

Do what you do best. Finish the phase, document the work, take photos if your contract requires it.

Step 4: Send the Invoice

In Projul, you build the invoice directly from your estimate or change order. The line items, amounts, and details are already there. You’re not retyping anything. Just select what’s done, generate the invoice, and send it.

Step 5: Client Reviews and Pays

Your client gets a clear invoice showing exactly what was completed and what they owe. With Projul’s payment processing, they can pay right from the invoice. No checks in the mail. No “I’ll get to it next week.”

Step 6: Repeat Until the Job’s Done

Move to the next phase and do it again. By the time you’re wrapping up the project, most of the money is already in your account. The final invoice is just the last piece.

When to Use Progress Billing vs. Lump Sum

Not every job needs progress billing. Here’s how to think about it.

Use progress billing when:

• The project runs longer than 4-6 weeks
• Total contract value is over $10,000-$15,000
• You need to purchase significant materials upfront
• The project has clear, distinct phases
• You’re working with a new client you haven’t built trust with yet

Use lump sum billing when:

• It’s a small, short job (a day or two)
• Material costs are minimal
• The scope is simple and well-defined
• You have a long history with the client

Most contractors doing remodels, new builds, or commercial work should be progress billing on almost every job. The risk of not getting paid, or waiting too long to get paid, is just too high on bigger projects.

If you’re doing service work or T&M jobs, service invoicing might be a better fit. It pulls in tracked time and materials automatically.

Common Progress Billing Mistakes

We’ve seen contractors make these mistakes over and over. Don’t be that guy.

Not Billing Enough Upfront

If you’re buying $30,000 in materials for a job and your first progress payment doesn’t hit until week three, you’re floating that cost yourself. Always get a deposit invoice out before materials are ordered. Projul lets you create deposit invoices in seconds, and it ties right into your budget tracking so you can see the cash flow impact.

Vague Milestone Descriptions

“Phase 1 complete” doesn’t mean anything to a client. Be specific. “Framing complete, passed rough inspection, ready for MEP rough-in.” The more detail in your invoice, the faster it gets approved. Projul lets you pull line items directly from your estimate so the descriptions stay consistent.

Not Tracking Change Orders

Here’s where progress billing gets messy fast. The client adds scope mid-project, you do the work, and then there’s an argument about what was included. Every change needs a documented change order before the work happens. Projul ties change orders directly to your billing so nothing falls through the cracks.

Billing Behind Schedule

Some contractors get so busy running the job that they forget to bill. Then they’re two phases behind on invoicing and cash flow is suffering even though the work is done. Set a rhythm. In Projul, you can see exactly what’s been billed and what hasn’t, so you never fall behind.

Not Reconciling with Your Books

Your progress billing needs to match what’s in your accounting software. If it doesn’t, you’ll have a mess at tax time and you won’t know your real job costs. Projul’s QuickBooks integration syncs your invoices automatically, so your books stay clean without double entry.

Progress Billing for Different Project Types

Progress billing isn’t one-size-fits-all. How you structure it depends on the type of work you’re doing.

Residential Remodels

Kitchen and bath remodels are perfect for progress billing. You’ll typically break it into demo, rough-in, installation, and finishes. Most homeowners expect a deposit upfront, and progress payments feel natural because they can see the work happening in their own house.

New Construction

New builds usually follow a draw schedule tied to construction milestones: foundation, framing, dry-in, rough mechanicals, drywall, finishes, and final. Lenders often require this structure for construction loans. Projul’s progress billing maps perfectly to draw schedules.

Commercial Projects

Commercial work often uses AIA-style billing with schedule of values. Progress billing in Projul lets you track completion percentages by line item, which is exactly what commercial clients and their accountants want to see. You can bill based on percentage complete or milestone complete.

Service and Repair Work

For smaller service calls, progress billing usually isn’t necessary. That’s where service invoicing shines instead. But for bigger repair jobs that stretch over multiple weeks, progress billing keeps the cash flowing.

Eliminate Risk While Building Client Trust

Projul’s progress billing protects you from absorbing the cost of material orders and canceled projects. Bill for work completed and materials ordered. Contractors using Projul report a 32% average profit increase, partly because they stop leaving money on the table.

Provide clients with a detailed breakdown of work completed and billed to reduce disputes and provide clear documentation. When clients can see exactly what they’re paying for at every stage, arguments go way down.

Avoid delays and disruptions to projects by securing project funds in advance and on time. Nothing kills a project timeline faster than waiting on a check.

Customize Invoices to Meet Your Business Needs

Projul lets you tailor each invoice to your unique business needs and client arrangements. With no per-user fees, your whole team can create and manage invoices without worrying about extra costs. Progress billing is available on Core+ and Pro plans.

Add flexibility to your invoicing process to account for all project types and payment schedules. Whether you bill by phase, by percentage, or by date, Projul handles it.

Build invoices directly from an estimate or change order, and create custom payment schedules based on your terms and conditions. You’re not starting from scratch on every invoice.

Works Hand in Hand with Projul’s Invoicing Tools

Progress billing is just one part of the picture. Standard invoicing handles your final bills and one-time charges, while service invoicing pulls tracked time and materials into invoices automatically. When your client is ready to pay, integrated payment processing lets them pay digitally from the invoice itself.

And when you need to see the big picture on job profitability, your budget pulls everything together so you know exactly where each project stands financially.

Setting Up Progress Billing That Protects Your Cash Flow

Cash flow kills more construction businesses than bad work ever will. A cash flow management guide can help you understand the bigger picture, but progress billing is the single most important tool for keeping money moving on active jobs.

Here’s how smart contractors set up progress billing to protect themselves. First, front-load your deposit to cover materials. If you’re buying $20,000 in lumber and fixtures for a kitchen remodel, that deposit invoice should go out before you place the order. Projul ties deposit invoices directly to your estimate so the client sees a clear breakdown of what their deposit covers.

Second, keep your milestones tight. Don’t set up three billing milestones on a job that takes four months. Break it into five or six phases so you’re collecting every two to three weeks. Shorter billing cycles mean less exposure if something goes sideways. If a client stops paying at phase three, you’ve only done two to three weeks of unbilled work instead of two months.

Third, document everything before you invoice. Take photos of completed work, log your daily notes, and make sure your time tracking is up to date. When a client questions a progress payment, you have the receipts. This also helps if you ever end up in a dispute or need to file a lien.

Fourth, reconcile every invoice with your budget. Progress billing only works if you’re tracking what you’ve billed against what you’ve spent. If you billed 60% of the contract but you’ve burned through 75% of the budget, you’ve got a problem and you need to catch it early. Projul’s budget tracking shows you exactly where each job stands financially.

Finally, send invoices the same day you hit a milestone. The longer you wait, the longer you wait to get paid. Contractors who bill consistently and on time report fewer payment disputes and faster collections. If you want to dig deeper into AIA billing for commercial work, we’ve got a full breakdown on that too.

Get Paid as You Build

Progress billing isn’t complicated. It’s just smart business. You do the work, you send the invoice, you get paid. No more financing your client’s project for months and hoping the check shows up at the end.

Projul makes the whole process simple enough that you’ll actually do it consistently. And consistency is what turns progress billing from a good idea into real money in your account. Over 5,000 contractors already use Projul to keep their cash flow healthy and their projects on track. Your crew can be up and running by lunch on day one.