![]() There are many benefits to using progress billing. Related: 16 Invoice Types (Plus Functions) Progress billing benefits The client's remaining balance at the end of the project The total amount the client has paid, up to the current dateĪpproved changes and adjusted amount owed The original contract amount for the entire project There are some common items to include, such as: The exact details are likely to vary depending on the specific project and funding needs. Typically, progress billings are most effective when they include items that the contractor and client agree upon before any kind of work begins. Related: What Does a Billing Coordinator Do? What does progress billing include? Since the contractor bills their client incrementally throughout the entire project, it's important to agree upon a definitive payment schedule, ensuring the client has the means to pay it each time. This type of billing system is common for long-term or big-budget projects because it allows the company or the contractor to fund the project continuously. A business prepares and submits multiple progress billings, each at different points throughout the life cycle of a critical assignment. Progress billing is an invoice system where a client submits their periodic payments to the contracting business up to the current date. In this article, we define what progress billing is, examine what it includes, review why it's beneficial, discuss how to use it and offer helpful tips for contractors. Familiarizing yourself with this payment system can help you implement it for your business and project needs. One viable method is the progress billing system, which allows contractors to receive regular payments throughout the life of a project rather than a lump sum at its completion. Be sure that your agreement states that you retain certain rights to a production until payment is received in full.When a company and client want to generate a project contract, it's important that they consider the payment plan that best fits the conditions of the agreement. Closeout - A final bill that reflects any change orders should be generated at the completion of a project.Some choose to watermark projects until at least 66% of a project’s budget is received. Postproduction - Once editing begins, another progress payment should be issued.Do not hand off project footage until at least 50% of a project’s budget is in hand. Be sure that you have received some form of payment before production begins. ![]() This is typically the most expensive stage of a project. Production - I recommend the submittal of an invoice once shooting begins.Issue a progress payment upon delivery of final preproduction items to the client. Tie a progress payment to the deliver of the script or other relevant preproduction tasks. Preproduction - This stage encompasses the bulk of project planning.Project Initiation - Once the project scope and budget is agreed upon, a deposit for 20% of the project should be submitted.This helps you by keeping your work funded and ensures that the client knows what’s going on financially. If a project has an extremely short timeline or does not involve a full-service production (such as shooting only) then adjust your payment schedule. Typically, I recommend the use up to five, equal payments. ![]() Second, by splitting the financial payments across progress you ensure protection for your financial security. First, it gives your client confidence that you have motivation to complete the work and show progress. The benefits of progress payments are many. Every video or photo project should be split into progress payments. While you may not be comfortable talking about money, your client will be a lot happier if there are clear expectations that define the business terms. Billing is one of those subjects that can often be an uncomfortable conversation. ![]()
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