Key takeaways
- Progress billing is invoicing for a long project in instalments as work is completed, usually against a schedule of values.
- Each bill shows the contract sum, the work done to date, the amount previously billed and the amount due now.
- Retention, commonly a percentage held back until completion, is released on defined events.
- A certifier or buyer representative normally approves each bill before payment.
Free PDF and Excel: Progress billing application and retention tracker. Get it below
What progress billing is
Progress billing is a method of invoicing a long project in stages, where each invoice covers the value of work completed since the last one.
It is common in construction, engineering and large services. The contract sets a schedule of values, which splits the price into parts. Each period the contractor reports how much of each part is done, and the invoice is the sum.
A contract is worth 1,000,000 with 10 percent retention. After month 3 the work done to date is valued at 300,000. Billed before is 0. Retention is 30,000, so the net due is 270,000.
After month 4 the work done is 450,000. Previously billed gross was 300,000. This bill is 150,000 gross, less 10 percent retention of 15,000, so 135,000 net.
| Line | Month 3 | Month 4 |
|---|---|---|
| Contract sum | 1,000,000 | 1,000,000 |
| Work done to date | 300,000 | 450,000 |
| Less retention at 10 percent | 30,000 | 45,000 |
| Net work to date | 270,000 | 405,000 |
| Less previously paid | 0 | 270,000 |
| Due this period | 270,000 | 135,000 |
Good practice
- Use a schedule of values with measurable items.
- Base each bill on measured progress, with a site report.
- Keep a running total of billed against contract.
- Handle variations through change orders.
- State when retention is released and what the release needs.
- Keep lien or payment security rules in mind where the law has them.
Free PDF and Excel
Progress billing application and retention tracker
An application for payment layout with retention maths, and a tracker for billed against contract.
- Application layout
- Retention maths
- Checks before approval
- Excel progress tracker
Overbilling risk
Front-loading, where early items are priced high, helps the contractor and hurts the buyer if the contractor fails. Compare billed value with measured progress each time. See statement of work for how milestones are written.
- Work done matches a site check.
- Previous bills add up.
- Retention is applied correctly.
- Variations are approved.
- Tax is correct.
- Supporting evidence is attached.
Last checked: 19 October 2026. Illustrative arithmetic. Construction payment law differs by country and contract form.
Frequently asked questions
What is progress billing?
Invoicing a long project in stages as work is completed.
What is retention?
A percentage of each payment held back until completion or a later date, as security for finishing and defects.
What is a schedule of values?
A breakdown of the contract price into items used to measure progress.
Is progress billing the same as milestone billing?
They are close. Milestone billing ties payment to events. Progress billing ties it to the value of work done.
Who approves a progress bill?
The buyer or a named certifier, depending on the contract.