What is progress billing?

Progress billing invoices clients for work as it is completed rather than waiting until project completion. Invoices may be sent weekly, monthly, or at defined percentage milestones. It keeps cash flowing during long projects. For professional service firm owners, progress billing reduces financing costs and collection risk on large engagements.

Key characteristics

• Billing during the project

• Improves cash flow

• Reduces collection risk

• Common for long projects

• Requires time tracking

• May follow milestones

Why it matters for professional service firms

Waiting months to bill on a large project is financing your client's project for free. Progress billing keeps cash flowing in as work happens. It also catches scope issues early. If a client disputes charges monthly, you fix the problem in month two, not month six when everything blows up.

Real-world example

Chris took on a $90,000 consulting project spanning six months. Instead of billing $90,000 at completion, he negotiated monthly progress billing based on hours incurred. Month 1: $12,000. Month 2: $16,500. Month 3: $18,000. By mid-project, he had collected $46,500 versus zero under end-of-project billing. When the client requested scope changes in month 4, Chris had leverage and cash already in hand.