How to Prepare a Progress Billing, Step by Step

What you need before you start

A progress billing is not put together from memory: it is built on documents that should already exist. Before you sit down to calculate, gather the following so the quantities and prices are beyond question.

• The contract bill of quantities, with its units and agreed unit prices.
• The period being billed (the two-week span or the month you are charging for) and the physical-progress cutoff for that date.
• The measurement worksheets for the period: on-site measurements of what was actually executed for each line item.
• The contract terms: the advance percentage received and the agreed retention percentage.
• The previous billings, so you don't bill again for progress already billed (you charge the cumulative amount minus what was billed before).

Step by step to prepare the billing

The procedure follows a fixed order. Each step builds on the previous one, so skipping one (especially the worksheet) is what triggers rejections from the owner's site supervision.

1. 1
   Measure the progress of each line item (measurement worksheet)

   On site, measure how much of each line item was executed during the period: square meters of wall, cubic meters of concrete, kilos of steel. Put the calculation in writing with gridlines, levels, and sketches: that is the measurement worksheet and it is the backup for the payment.

2. 2
   Determine the quantity to bill for the period

   If you keep cumulative control, subtract what has already been billed: quantity for the period = cumulative progress to date − progress billed in previous periods. That way you never charge twice for the same work.

3. 3
   Value the work (get the gross amount)

   Multiply the quantity of each line item by its contract unit price and add up every line item. That sum is the gross amount of the billing, the period's progress expressed in money.

4. 4
   Recover the advance

   Apply to the gross amount the same percentage you received as an advance. If the advance was 30%, 30% of the gross amount is recovered in this billing, gradually paying back what you were given up front.

5. 5
   Apply the retention

   Deduct the agreed retention percentage (often 5%) on the gross amount. That amount is not lost: it accumulates as a guarantee and is released at final settlement or replaced by a bond.

6. 6
   Adjust and get the net amount payable

   Add or subtract whatever applies (price escalation, liquidated damages, deductions) and arrive at the net amount payable. The invoice is issued on that net amount and the corresponding taxes are calculated on it.

Full worked example

Take a two-week billing with three line items. The contract was agreed with a 30% advance and 5% retention. First we value the period's progress line item by line item:

Line item A — brick wall: 120 m² executed × $450/m² = $54,000. Line item B — concrete slab: 40 m³ × $2,800/m³ = $112,000. Line item C — reinforcing steel: 1,500 kg × $32/kg = $48,000. Gross amount = $54,000 + $112,000 + $48,000 = $214,000.

Advance recovery: 30% × $214,000 = $64,200. Retention: 5% × $214,000 = $10,700.

Net amount payable = $214,000 − $64,200 − $10,700 = $139,100. Out of progress valued at $214,000, this billing pays $139,100: $64,200 is deducted because it was already paid up front as an advance and $10,700 is held as a guarantee. The invoice is issued on that net amount and any applicable taxes are calculated on it.

Mistakes that get a billing rejected

These are the slip-ups that most often delay payment or get a billing returned by the owner's site supervision:

• Billing progress with no worksheet to back it up, or with worksheets that don't match the project.
• Billing quantities greater than what was actually executed (overstating progress).
• Failing to subtract what was already billed and charging again for work from previous periods.
• Using prices other than the contract's, or including line items outside the bill of quantities without authorization.
• Forgetting the advance recovery or applying it with the wrong percentage.
• Not recording the billing in the construction log, or in the electronic construction log on public works.

How to speed up the process with Matterial

Preparing the billing by hand —cross-referencing worksheets with the bill of quantities, valuing, tracking the cumulative total, and applying advance recovery and retention— is slow and prone to data-entry errors. The key is to have the progress of each line item and the contract prices in one place, so the gross amount, the advance recovery, the retention, and the net are calculated automatically and don't depend on a fragile spreadsheet.

With that control, every period cutoff produces a billing that reconciles against the contract and is traceable back to the worksheet, which is exactly what prevents rejections and payment delays.