Progress billing is a payment structure where the contract value is split across multiple invoices issued throughout the project rather than one invoice at completion. Common structures include milestone-based billing (invoice triggered by completion of mobilization, framing, drywall, paint, final), percent-complete billing (invoice for each 10 to 20% of work completed), and AIA G702/G703 billing (standardized commercial format with schedule of values).
Progress billing benefits both parties. The contractor finances less of the project out of working capital. The owner pays incrementally as work is verified rather than prepaying. On commercial work, progress billing is the dominant pattern; lump-sum end-of-job billing is rare except for very small projects. Retainage (typically 5 to 10% withheld from each progress invoice) is common alongside progress billing on commercial work.