Note
Progress Billing: When Can You Invoice Before Handover?
Without progress billing, a four-week factory solar installation ends like this: the truck drives away on day twenty-eight, the handover gets signed, you raise the invoice, and then you wait thirty days for payment.
Your team was on site for four weeks. Materials were purchased upfront. Fuel and accommodation went out as they happened. You carry the full cost of the job for nearly two months before a single baht comes back. This is the cash-flow gap that progress billing is designed to close, and it is a standard arrangement on any project running longer than two weeks.
What Is Progress Billing and How Does It Work?
Progress billing means issuing invoices at agreed points during a project, not only at the final handover. Most contracts for jobs longer than ten to fourteen working days include at least two payment stages. A common structure for a factory LED retrofit or rooftop solar installation:
- First stage (30%): on contract signing, or when materials are confirmed ordered
- Second stage (40%): when the main installation work is physically complete
- Final payment (30%): on customer sign-off of the full handover document
Some contractors use 30/30/40 or 40/50/10 depending on how material-heavy the job is. The exact split matters less than having a written, agreed definition for what triggers each stage, in the contract before mobilization.
What Does Each Payment Stage Actually Mean?
This is where most progress billing arrangements break down. The contract says “progress payment on completion of installation” but nobody has defined what completion means before the commissioning team arrives. Three weeks later, two people are on a roof disagreeing.
Each stage needs a specific, observable condition. Vague milestones get disputed. Concrete ones get confirmed and paid.
Useful definitions for the second-stage trigger on an electrical installation:
- All panels mounted and wired to combiner or junction boxes, visually inspected, and photographed
- Conduit runs complete and secured to structure
- Inverter or distribution panel in its final position
The condition should be something the customer’s site engineer can verify in a one-hour walkdown. If they have to take your word for it, the payment waits while they find someone with authority to approve it.
Do You Need a Separate Document for Each Stage?
Yes, and it does not need to be complicated.
A progress billing note for the second stage is a short document, typically one to two pages:
- Project name, site address, and contract reference
- The milestone definition, written exactly as it appears in the contract
- A checklist of the conditions, each marked complete on the day
- Photographs showing the completed work (four to eight images is usually enough)
- A signature line for the customer’s authorized representative
You are confirming a defined scope of physical work, with evidence, in exchange for an agreed payment. The final handover, with its full commissioning and testing record, is still ahead.
Most contractors skip the photographs or defer them. A progress note submitted three days after the milestone, with unclear or undated images, looks assembled after the fact. Take them on the day, with timestamps, before anyone leaves.
A Worked Example You Can Run on Your Own Numbers
A rooftop solar installation at a factory is contracted across four weeks, with a payment structure of 30/40/30.
First stage: On contract signing. Used to procure panels and major components.
Second stage: Due when panels are fully mounted and string-wired to combiner boxes, visually inspected. On day eighteen, the team completes the string wiring. The project coordinator and the factory’s electrical engineer walk the roof, review the photographs taken that afternoon, and sign the progress billing note. The invoice goes out the same evening.
Final payment: Due on signed handover after commissioning, testing, and documentation.
With a 30-day payment term, the second-stage payment arrives around day forty-eight. Without progress billing, you would wait until day twenty-eight for the handover, then until day fifty-eight for a single payment covering everything.
What Causes Progress Payments to Stall?
Three failures account for most delays.
The milestone definition was not in the contract. If the customer’s procurement team has no signed document specifying that stage two is triggered by physical completion of the mounting and wiring, they have standing to hold the payment pending their own review. Get the definitions into the contract before mobilization.
The photograph evidence was not captured on the day. A progress note submitted several days after the milestone, with photographs that are unclear or undated, creates doubt about whether conditions were actually met. Same-day documentation, with timestamps, removes that doubt.
The wrong person signed. A signature from a supervisor who lacks authority to confirm milestone completion creates the same problem as a handover signed by someone who cannot authorize acceptance. Confirm in writing, before the project starts, which person at the customer’s organization is authorized to sign at each stage.
How Does This Fit With the Final Handover Gate?
Progress billing does not replace the requirement for a signed handover at project completion. It moves money forward without removing that final gate.
The first gate is the progress milestone: a defined scope of physical work, confirmed with evidence and an authorized signature, releasing the progress payment. The second gate is the final handover: the complete system commissioned, tested, documented, and accepted, releasing the remaining balance.
Both gates need to hold. A progress payment with a loose definition or unsigned note is not progress billing; it is an early invoice without backing. The discipline that makes the closing gate work at project end applies to every payment stage before it.
FAQ
Can progress billing work on a two-week project?
A two-week project with significant upfront material costs can justify a single progress payment at the midpoint, often structured as 40/60. Write the milestone condition into the contract before work starts, agree on the evidence standard in advance, and issue the invoice the day the milestone is confirmed. The shorter the project, the more precisely you need to define the trigger.
What if the customer delays signing the progress note?
Set a response window in the contract. A standard clause gives the customer three working days to raise a written objection to a submitted progress note. No objection within that window is treated as acceptance. This needs to be agreed before the project starts, not negotiated after a delay has occurred. Without it, you are waiting on goodwill rather than a contractual timeline.
How do you track which projects have hit each billing stage?
On a single project, a shared tracker in a spreadsheet is usually enough. Across five or six concurrent projects, the problem is knowing which stage each job is at, which progress notes are outstanding, and which invoices are waiting on a signature. That visibility is what the owner’s screen in TRACE 30 is designed to provide, without building a custom tool for each contractor who faces it.
If you want to see how TRACE 30 handles billing visibility across concurrent projects, the program is described at /program/. You can also book a short call to walk through how it fits your current project load.