Overview
Progress billing lets you bill customers as you reach specific milestones in a project. This helps you plan when you're going to collect payment from customers.
Who uses this feature
Administrators, office employees, managers, accountants, and bookkeepers
Feature configuration
Account configuration is required to use this feature. Please contact Technical Support for details.
Tip: Progress billing is optional and should be used only when billing your customers throughout the project based on milestone completion. Before generating progress billing for a project, confirm that the contract allows for progress payments.
Things to know
To properly use progress billing, you must convert a job into a project to generate invoices.
You can create a non-job invoice and progress bill without the AIA Billing style. To apply this feature the account configuration is required. For more, contact Technical Support.
You can't see $0 Project Invoices on the Accounting screen. Companies using Progress Billing can generate numerous $0 invoices without limitations. Showing these invoices on the Accounting screen can impact reporting accuracy and may cause confusion during export.
Retainage calculation can be project-wide or item-level. When using Applications for Payment, retainage may be calculated using a single project-wide retainage rate or variable retainage rates by line item, depending on your Application for Payment settings.
Configure Application for Payment settings
There are two ways to configure Application for Payment (AFP) settings. You can configure them using the:
Application for Payment global settings screen
Application for Payment settings tab in the Continuation Sheet
Application for Payment global settings screen
This screen includes the following settings:
Retainage Project Label and Budget Code: Assign a project label and budget code for retainage items to categorize them accurately.
Retainage Items: Lets you assign the following for retainage.
Service: Assign a service task and the associated GL account.
Material: Assign a material code and the associated GL account.
Payment Terms: Select the default payment term when creating a new Application for Payment.
Invoice Settings: Select if you want to include the cost of line items or the line item quantities on invoices created through the Application for Payment by default.
Caution: Enabling this may result in the cost of invoice line items being added to the invoice twice.
Avalara Sales Tax: Select if you want to use Avalara for calculating sales tax. When enabled, Application for Payment preview won't be available but sales tax will appear when you print the document.
Note: This option is only available if you are integrated with Avalara. For more, see Avalara integration guide.
Sales Tax Display: Select if you want to display sales taxes as a separate row on the Continuation Sheet.
Rounding Items: Displays the pricebook items used to apply rounding adjustments when AFP line item amounts are not evenly divisible by unit price. These items are created automatically for your account when Progress Billing is enabled. No setup is required.
Service: The service item used for rounding adjustments on service line items.
Material: The material item used for rounding adjustments on material line items.
Equipment: The equipment item used for rounding adjustments on equipment line items.
Note: If rounding items are missing, a settings error appears on this screen. Contact Technical Support for help.
Access Application for Payment global settings screen
To access the Application for Payment global settings screen, on the top toolbar, click Settings > Accounting > Application for Payment.
Application for Payment settings tab
In the Settings tab, you can enable the following options:
Enable Edit Using Price: Lets you edit billing amounts based on the unit price rather than percentages or quantities completed.
Allow retainage to be collected without 100% work complete: Use this option to collect a portion of the retainage prior to the Description of Work being 100% completed.
Include the cost of line items in invoices generated through the Application for Payment: Lets you include or exclude Application for Invoice line items costs on invoices. This prevents double costing on chargeable materials or equipment when using the Application for Payment feature.
Include quantities for line items generated from the Application for Payment: When enabled, line items created from an Application for Payment will include quantities. Material quantities will be consumed from inventory, and equipment quantities will be installed as equipment. This may create duplicate line items if the same items already exist on the job.
Use Avalara to calculate sales tax: When enabled, uses Avalara to calculate sales tax. The Application for Payment preview won't be available but sales tax will appear when you print the document.
Note: This option is only available if you are integrated with Avalara. For more, see Avalara integration guide.
Display sales tax as a separate row on the continuation sheet: Lets you display sales taxes as a separate row in the Continuation Sheet.
Access Application for Payment settings tab
Use the Settings tab in the Application for Payment screen to configure your Application for Payment settings. These settings need to be configured for each project.
To access this tab:
Search for and go to the project.
In the project dashboard, click Actions>Add Application for Payment.
At the pop up, select an option on how you want the description of work to display.
Click Continue.
In the Application for Payment screen, click Settings.
Application for Payment and Continuation Sheet
Application for Payment (AFP) helps you manage progress billing by invoicing for portions of a job as work is completed. These invoices track the total contract amount, work completed to date, retainage, and the remaining balance. AFP includes both the standard invoice and the Continuation Sheet, which breaks down billed amounts by line item.
For more, see Complete Application for Payment and Continuation Sheet.
Progress invoice using Application for Payment
When using Application for Payment, you generate a progress invoice that bills against the total contract value based on the percentage of work completed. Before creating the invoice, make sure your estimate is finalized and billing items are set up to support scheduled values and retention.
For more, see Create a progress invoice based on Application for Payment.
Manually create a project invoice for a project
Search for and go to the project you want to create an invoice for.
From the What do you want to search for? dropdown, select Project, and click the Search icon.
Select the project you want to create an invoice for.
On the Project screen that opens, do one of the following options.
From the Actions dropdown, select Add Invoice.
From the side menu, click Financials, go to the Invoice section, then click Add Invoice.
The Add Invoice pop-up window opens.
From the Business Unit dropdown, select a business unit.
Click Add Invoice. A blank invoice opens and is not tied to any job, only to the project.
Note: The invoice date defaults to the date you created the invoice. If you want to update the invoice date, click Update invoice details and enter the date in the Invoice Date field.
Apply payment terms to the invoice as needed:
Click Update payments terms & due dates.
Select a payment term.
Click Save. For more on payment terms, see Using payment terms.
Note: If you want the Budget vs. Actual for Revenue broken out by billing milestones, then the revenue services on the estimate need to be broken down by billing milestones or phases by applying labels with categories that correspond to the milestones or phases. The estimate also needs a label applied corresponding to its phase.
Collect payments and apply them to the appropriate invoice. Payments do not require labels because they're only displayed in the Project Summary. For more on collecting payments, see Collect a payment.
Note: If you want to create an itemized invoice, you can only create it yourself by adding each item individually. You can't aggregate items on existing invoices, estimates, purchase orders (POs), or jobs into the progress billing invoice.