What is the purpose of progress invoicing?

Progress invoicing is a common practice in projects of all kinds, where the client (i.e. the client) pays advance payments to the prime contractor (i.e. the company responsible for carrying out the work) at different points in the progress of the project. These instalments are generally paid when certain project milestones have been reached or when certain deliveries have been made.

Progress invoicing has several purposes:

  1. Allow the company to cover project costs as it progresses.
  2. Guarantee the solvency of the company and the continuation of the project.
  3. Provide accurate financial monitoring of the project to the client.
  4. Foster good collaboration between the company and the client, allowing the client to monitor the progress of the project and giving the company regular access to funds to continue the work.

Progress invoicing is usually provided for in the contract, which defines the terms of payment of the deposits and the stages of the project that
will be covered by each deposit.