Guide · Getting paid
Progress billing for small contractors
On a two-week job, waiting until the end to get paid means you finance the whole thing. Bill in stages instead.
Progress billing means invoicing a job in stages tied to milestones, such as a deposit to start, a payment when materials are delivered or rough-in is done, and the balance on completion. Write the schedule into the estimate before the customer signs, invoice each stage when it's reached, and don't bill ahead of the work: in some states, like California, progress payments can't exceed the value of the work done and materials delivered.
A simple schedule for a two-week job
| Stage | When | Amount on a $12,000 job |
|---|---|---|
| Deposit | On signing, within your state's cap | $1,000 |
| Materials delivered | Cabinets and fixtures on site | $4,500 |
| Rough-in complete | Plumbing and electrical roughed in and inspected | $3,500 |
| Completion | Final walkthrough | $3,000 |
Example only. Each payment should match work actually done or materials actually delivered.
Pick milestones the customer can see
- Visible events, not percentages. "Cabinets delivered" is easy to verify; "40% complete" starts arguments.
- Front-load materials, not labor. Bill for materials when they arrive; that's money you've already spent.
- Keep the last payment meaningful. A final payment big enough to matter keeps both sides motivated to finish the punch list.
Put it in the estimate
The payment schedule belongs in the estimate the customer approves, under the total. Name each stage, its amount, and what triggers it. Then each invoice simply says "Stage 2 of 4: materials delivered, per the approved estimate."
Don't bill ahead of the work
Some states limit progress payments on home improvement jobs. California's contractors board says payments other than the down payment can't exceed the value of the work performed or materials delivered. Even where there's no rule, billing ahead of the work is how disputes start. If a stage slips, the invoice waits.
If the job changes
Added work gets its own change order with its own price, either billed when it's done or added to the next stage. Write which on the change order.
Progress billing in Settle
Put the payment schedule in the estimate's notes and add a deposit percentage if you take one. When the first stage is reached, convert the approved estimate to an invoice and edit it down to that stage's amount; for later stages, Duplicate that invoice and change the line and amount. Send each one from your phone with a pay link. Each payment goes to your own Stripe account, and each invoice shows when the customer opened and paid it. Settle doesn't track a running contract balance across invoices, so note "Stage 2 of 4" on each one.
What is progress billing?
Invoicing a job in stages as milestones are reached, instead of one bill at the end.
How many progress payments should a small job have?
Usually three or four: a deposit, one or two milestones like materials delivered or rough-in done, and a final payment on completion.
Can a contractor ask for payment before work is done?
A deposit within your state's limit, yes. Beyond that, some states, including California, don't allow progress payments that exceed the work performed or materials delivered.
Sources
Send each stage's invoice from your phone with a pay link.
Free on iPhone. Unlimited estimates and invoices. 7 days of Pro to try the voice drafts, and you cancel in two taps.
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