Progress invoicing: billing a contract as agreed stages are achieved

Progress invoicing is useful when a contract is delivered over time and billing follows measurable stages. It protects cash flow and gives the customer a clear basis for each bill. The milestone should describe an objective event, such as approved design or accepted installation, rather than an arbitrary label.

In DNA, Progress or Mixed terms enable the sales order Billing Plan. The PROGRESS invoice selects the sales order and eligible milestones. Work packages connect billing to the project structure and revenue account. A physical delivery can support progress evidence, but a progress-billing delivery note is not simply invoiced through the normal delivery route.

When progress billing is useful

A long contract can require substantial work before final completion. Waiting until the end to issue every invoice may place unnecessary funding pressure on the supplier. Billing the whole value at the beginning may be unacceptable to the customer.

Progress billing creates an agreed relationship between stages of work and billing. It is useful for installations, projects, and other arrangements where measurable events provide a sensible basis for payment. It should reflect the contract, not merely the supplier's need for cash.

An objective milestone

A fictional 100,000 installation contract has three milestones: design approval 20%, equipment delivery 50% and accepted commissioning 30%. The first approved milestone supports 20,000 of gross billing before any applicable tax, recovery or retention. Shipping equipment early does not justify billing commissioning before it is accepted.

Design approval is useful because the parties can identify evidence that it occurred. A milestone called Stage 1 without a defined achievement is less useful: the label does not explain why the invoice is justified.

Completion evidence and previously billed amounts matter together. Evidence supports the right to bill; the history helps prevent the same milestone from being billed twice. A partial or disputed achievement may require further clarification rather than assuming the whole milestone is complete.

Gross billing and current payment due

The gross milestone amount describes the value being billed for the stage. Advance recovery may apply money already collected. Retention may withhold part for later collection. Taxes or other contractually applicable components can also affect the final document.

These components should remain distinguishable. A lower current amount due does not necessarily mean less work was billed. It may mean the supplier is applying an advance or recognising a contractual withholding.

The DNA connection

DNA's sales-order billing plan ties the milestones to the agreed contract structure. Eligible milestones form the basis of progress invoices, and work-package relationships can connect billing with the kind of work and its financial mapping.

Physical delivery remains useful evidence where relevant, but it is not a substitute for the milestone process. Equipment delivery and accepted commissioning are different achievements. A clear plan allows sales, project staff, and finance to understand why each invoice exists and what remains to be billed.