Progress billing for contractors

Short answer

Progress billing invoices a project in stages as work completes, rather than once at the end. Structure draws around milestones or percent complete, take a deposit before mobilising, bill promptly at each milestone, and account for retainage held until final completion. The goal is to stay cash-positive on every job.

Milestone draws vs percent complete

Milestone draws tie payment to observable events: contract signing, material delivery, rough-in, drywall, final. Percent complete bills a share of each line item as it is finished, which is standard on commercial work. Milestones are easier for homeowners to understand and dispute less.

A workable residential draw schedule

A common structure: 10 to 30% deposit at signing, 25 to 30% at material delivery or demolition, 25 to 30% at rough-in or midpoint, 15 to 25% at substantial completion, and a small final payment at punch-list sign-off. Local law may cap deposits, so check your jurisdiction.

Stay cash-positive

The rule is that money in should lead money out at every stage. If a draw lands after you pay for materials, you are financing the client. Adjust the schedule so each draw is collected before the cost it funds is incurred.

Retainage

Retainage is a percentage, commonly 5% to 10%, held back until completion. On jobs with retainage, your net profit often lives entirely inside the retained amount, so track it deliberately and invoice for its release the day conditions are met.

How WinkScope handles it

WinkScope generates an invoice schedule from the approved estimate, supports deposits, milestone draws, percent-complete billing and retainage, sends invoices with Stripe payment links, chases overdue balances automatically and shows collected versus outstanding per project.

Frequently asked questions

How much deposit should a contractor take?

Enough to cover mobilisation and initial materials, commonly 10% to 30%. Some jurisdictions cap residential deposits by percentage or dollar amount, so verify the local rule.

What is AIA billing?

A standardised progress billing format used on commercial projects, based on a schedule of values with columns for work completed to date, stored materials and retainage.