Set up progress billing with clear milestones, holdback, and paperwork. Use simple steps to invoice faster, reduce risk, and keep cash flow steady.
Ditch the paperwork and reclaim your time with Donizo.
Contractors across Europe trust Donizo to handle their quotes and invoices while they focus on what they do best: their craft.
Cash flow makes or breaks a job. Progress billing keeps money moving while work moves forward. With progress billing, you split the total price into a deposit, draws, and a final payment. It’s simple when you set clear milestones and good paperwork. In this guide, you’ll learn what progress billing is, why it helps, and how to set it up. We’ll walk through a practical workflow you can use this week. You’ll see examples, common mistakes, and fast fixes. The goal is less chasing money and more building.
Progress billing breaks a job into a deposit, 2–4 progress draws, and a final payment with holdback/retainage if required. Put the schedule in your proposal, get client sign-off, then invoice each milestone as it’s done. Use photos, brief notes, and signed approvals to release payments without delay.
Progress billing means you invoice the job in parts as work moves forward. You collect money at key points instead of waiting until the end. This protects cash flow and reduces risk.
Your numbers can change. The idea stays the same: clear milestones, clear invoices, fewer delays.
A good draw schedule is easy to explain in one minute. Use plain language and visible checkpoints.
Pick 3–5 events clients can see:
Keep percentages simple and fair. For example:
This is just a model. Adjust for labour vs. materials, job size, and risk.
Tie due dates to events, not calendar days. Example: “Draw 2 due within 7 days of rough-in completion and inspection.” This reduces arguments about weather or supplier delays.
In many Canadian provinces, a 10% statutory holdback applies. Check your provincial lien act. Put the holdback terms in your paperwork from day one.
If you’re also working on pricing, this pairs well with understanding pricing strategies and how to build margin safely.
Good paperwork gets you paid faster. It also keeps you safe when things go sideways.
For contractors dealing with formal paperwork, we recommend creating professional proposals that clients can approve easily. It reduces back-and-forth and speeds up the first deposit.
This is a clean, repeatable process you can run on every job.
Tools like Donizo let you capture details by voice, generate a branded proposal, send it by email, and collect a digital signature. That keeps momentum while the client is excited.
If you’re also looking to streamline invoice templates that save time, our guide covers clean layouts and clear payment terms.
With platforms such as Donizo, you can convert accepted proposals to invoices in one click. That saves 1–2 hours per draw and reduces errors.
Some jobs don’t fit neat milestones. That’s okay. You can bill by percentage complete and still keep it simple.
This approach reduces back-and-forth by half because clients see progress, not just numbers.
If you want to improve managing project timelines effectively, learn how to tie schedule updates to your billing checkpoints.
Changes happen. Don’t let them wreck cash flow.
You can create a quick change proposal using Donizo and collect a digital signature in minutes. This keeps your main schedule intact and protects your margin.
When changes are large, update the proposal and payment plan. Keep it in writing.
Many contractors use 10–30% based on job size, materials, and lead times. For material-heavy jobs, a higher deposit reduces risk. Always check local rules and your contract terms.
They’re often the same in practice. Milestone billing ties draws to visible events (inspection passed). Progress billing can also be percentage-based (e.g., 60% complete). Use the method that’s easiest to prove and approve.
In many provinces, owners must hold back a portion (often 10%) until after the lien period. The exact rules and timelines vary. Check your provincial lien act and reflect the holdback in your proposal and invoices.
Refer to your contract. Send a written reminder, then a formal notice. Use your stop-work clause if needed. Stay professional and document everything. If problems continue, seek legal advice about lien rights in your province.
Yes, if scope changes make milestones awkward. Send a short written update with the new method, get client approval, and continue billing with clear photos and notes.
Progress billing keeps money moving, stress low, and jobs on track. Set a simple schedule, put it in your proposal, and invoice within 24–48 hours of each milestone. Use photos and short notes to prove progress. For faster turnarounds, tools like Donizo help you create proposals, collect e-signatures, and convert to invoices in one click.
Next steps:
Do this, and your cash flow improves on the very next job.