Progress Invoicing: A Practical Guide for Small Businesses

What is progress invoicing?

Progress invoicing (also called milestone or staged billing) is invoicing a client at agreed points during a project instead of only at the end. Each invoice covers the portion of the total value matching work completed.

When to use it

Progress invoicing fits when:

• The project spans weeks or months
• You carry significant upfront costs (materials, labour)
• The contract is large enough that waiting until completion strains your cash
• Industry practice supports staged billing (construction, consulting, design, IT)

How to structure progress invoices

• Percentage-based, a fixed share at each stage (e.g. 25% at start, 25% halfway, 25% at practical completion, 25% at handover).
• Milestone-based, invoice when specific deliverables complete (design signed off, build complete, testing passed).
• Time-based, invoice at regular intervals (weekly, fortnightly, monthly) for work done in that period. Common in consulting.

"Staged billing is the single easiest cash-flow win for a project business, and most owners under-use it. Bill the milestone the day you hit it, don't wait for the project to wrap to start the payment clock."

Shane, Head of Growth, FundTap

Best practices

• Define milestones in the contract, agree invoicing stages before work starts.
• Invoice promptly, send the moment a milestone is reached.
• Describe the work clearly, detail what each invoice covers.
• Track progress vs billing, keep invoicing aligned with actual completion.
• Use retention clauses where standard, a 5–10% retention is common in construction.

Progress invoicing and your cash position

Staged billing shortens the gap between work and payment, but clients may still pay on 30–60 day terms. If you need the cash sooner, FundTap lets you fund progress invoices as soon as they're issued, with the advance the same day instead of weeks (median first fund: 3 days from sign-up; FundTap data, 2026). The selective model means you fund only the milestone invoice you need to.

Frequently asked questions