Definition
Progress tracking records the actual work completed on-site, and billing is issued to match the project’s real progress.Progress billing is a payment approach Billing is a payment method in contracting and construction where payments are made in stages as work advancesthe client pays the contractor in stages, based on the actual progress of work, rather than in making a single lump sum at the end. The typical process final payment.
The process typically includes:
Agreeing on the total contract amount and work schedule.
Breaking the Dividing the project into measurable phases or percentages of completion.
Submitting progress documentation Submit Payment Applications based on Progress Reports at regular intervals (e.g., monthly) to verify document completed work.
Receiving payment from the client for the completed portion, instead of the full contract amount upfrontRegistration of Payment Certificates Received from client to record certified value of work done.
Generating Progressive Invoices, adjusted for any advances received and retentions withheld.
This approach ensures that payments are directly tied to certified project progress, supporting contractor cash flow while protecting the client’s financial interests.
In FirstBit
In FirstBit Contracting, a A progressive invoice is generated through a series of linked documents, reflecting the portion of work completed, after adjusting for advance payments and retention.
- Advance Invoice - Issued to request upfront payment before work begins.
- Payment Received - Records client payment and marks it for offsetting.
- Project Progress Report - captures the percentage of work completed on-site.
- Payment Application Issued -Drafts the billing claim based on reported progress.
- Payment Certificate Received - Approves and certifies the amount to be invoiced.
- Progressive Invoice - An invoice issued based on the certified amount, with any applicable advance deductions
- Credit Note - Used to adjust or correct previous invoices.
Retention
Retention It is a percentage (e.g., 10%) of the invoiced each invoice amount that is temporarily withheld to ensure proper project completion and defect resolution. In FirstBit, the retention can be applied per invoice or only at the project’s end, depending on contract settingsis automatically applied on every invoice linked to a contract with retention enabled. The retained amount portion is posted separately to Retention Receivables and can be claimed later. Once the retention period ends (e.g., after project completion or the defects liability period), the contractor can issue an Invoice (Retention Claim) to release and collect the withheld amount.
Details on how VAT is treated on retention are specified in the contract attributes.
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