Progressive Invoicing in QuickBooks Online – How to Bill in Stages

For businesses that work on long-term projects or large contracts, billing the entire amount upfront isn't always practical. That’s where progressive invoicing (also known as progress billing) comes in.

Progressive invoicing allows you to invoice your customers in phases – based on project milestones, completion percentages, or agreed-upon schedules. QuickBooks Online (QBO) makes it easy to create invoices and track payments over time.

In this post, we’ll cover:

• What is progressive invoicing?

• When to use it

• How to set it up in QuickBooks Online

• Common mistakes to avoid

What Is Progressive Invoicing?

Progress invoicing means billing your customer in portions instead of charging the full amount upfront. It’s commonly used in:

✔ Construction & contracting – Invoice as work progresses (e.g., 30% upfront, 40% mid-project, 30% on completion)
✔ Consulting & professional services – Charge based on project milestones
✔ Custom manufacturing & large orders – Bill as production stages are completed

📌 Example:
A web design company agrees on a $10,000 website project. Instead of charging all at once, they invoice:

• 30% ($3,000) at contract signing

• 40% ($4,000) when the first draft is delivered

• 30% ($3,000) when the final website is launched

How to Set Up Progressive Invoicing in QuickBooks Online

Step 1: Enable Progress Invoicing

Before you start, turn on the feature in QBO:

➤ Click Settings ⚙ → Account and Settings
➤ Go to the Sales tab
➤ Find the Progress Invoicing section
➤ Check the box for Create multiple partial invoices from a single estimate
➤ Click Save and Done

Step 2: Create an Estimate for the Full Project Amount

Progress invoicing in QBO starts with an estimate, which gets converted into invoices as work progresses.

➤ Click + New → Estimate
➤ Select the Customer
➤ Add the products/services and enter the total project amount
➤ Click Save and Send (or just Save to convert later)

💡Tip: The estimate helps you and your client agree on the total before breaking it into invoices.

Step 3: Convert the Estimate into a Partial Invoice

Once the first billing stage is due:

➤ Open the Estimate and click Create Invoice
➤ Choose how much to bill:

• A percentage of the total (e.g., 30% upfront)

• A custom amount per line item

• The full amount of specific items

➤ Click Save and Send (or just Save and Close)

Repeat this process for each milestone until the project is fully invoiced.

Step 4: Track Outstanding Invoices & Payments

To monitor what’s been billed and what’s still due:

➤ Open the Estimate → You’ll see the progress of invoices created
➤ Use the Invoices report in QBO to track paid and unpaid amounts

Common Mistakes to Avoid

• Skipping the Estimate – Always start with an estimate to keep track of progress

• Billing the Wrong Percentage – Double-check amounts before sending invoices

• Not Tracking Payments – Use QBO reports to see what’s been paid and what’s outstanding

How We Can Help

Setting up progress invoicing correctly ensures smooth cash flow and accurate financial tracking. We can help you set up progress invoicing in QuickBooks Online, ensure estimates and invoices are linked properly, and reconcile payments to track outstanding balances accurately.

💬 Need help with invoicing in QBO? Contact us today!