Progress payments: get paid as the job moves along

Pick clear milestones

Choose points that are easy to agree on, like 'frame complete' or 'rough-in done', not 'about halfway'.

Match payments to cost

Early stages often cost more because of materials. Set payments so you are never carrying much of the job on your own money.

Plan the schedule

Invoice at each stage

Send the invoice when the stage is finished, with a photo if you can. A picture of the finished stage answers most questions.

Write it into the contract

State the stages and amounts before you start. For larger building work, your state may have specific rules about progress payments, so check them.

Tip. Photograph each stage before you invoice. Photos settle arguments quickly.

An example schedule

• Deposit when the contract is signed.
• Second payment when the frame or main structure is complete.
• Third payment at lock-up or rough-in stage.
• Final payment on completion and handover.

Keep stages fair

Customers feel safer when each payment clearly matches finished work. That protects you too, because a customer who understands the schedule is less likely to dispute a stage.

A sample schedule

Why progress payments work

• You are never far ahead of what you have been paid.
• The customer pays for work they can see.
• Problems are caught early, not at the end.
• Large invoices are smaller and easier to pay.
• A stalled payment tells you early that something is wrong.

Write it into the contract

1. List milestonesDescribe each one in plain words.
2. Set the percentage or amountFor each stage.
3. Say when payment is dueFor example, 7 days from invoice.
4. Say what happens if unpaidPause and notice steps.
5. Both sides signKeep copies.
6. Follow itInvoice when the milestone is reached, not later.

Watch out. Rules for building work, including payment claims and limits on staged payments, differ by state. For larger jobs, check your state's requirements or speak to your industry body before you set a schedule.

Mistakes with progress payments

• Vague milestones such as 'when half done'.
• Falling behind on invoicing so the schedule means nothing.
• Taking payments ahead of the work, which can breach rules and cause disputes.
• Not recording variations separately.
• Skipping a written schedule on larger jobs.

A real-life scenario

A plasterer quoting a $24,000 renovation set five milestones: deposit, sheets hung, first coat, final sand and completion. At each stage he took photos, sent an invoice that day and referred back to the schedule in the contract. When one payment ran late he paused after giving written notice, and the customer paid within two days.

Photos, short invoices and a written schedule make staged payments routine instead of awkward.

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