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Progress Billing Invoices: The General Contractor Guide

Comprehensive guide to progress billing in construction. Learn Schedule of Values (SOV), percentage-of-completion invoicing, and retainage rules.

Marcus Vance6 min readUpdated 2026-06-20
Standard Invoice Architecture

Compliant invoices balance legal identification, unambiguous itemization, and clear payment instructions.

1. Header & PartiesBusiness legal name, address, tax ID/EIN, client billing address.
2. Line Item TableDetailed task description, unit rates, quantities, and taxable status.
3. Terms & RemittanceDue date, payment options (ACH/card), and late fee penalties.
Quick Answer · progress billing invoice
Progress billing invoices clients incrementally as construction phases are completed, rather than waiting for the entire project to finish. Invoices detail the total contract value, previous billed amounts, percent completed this period, and retainage withheld.

Progress Billing for Contractors: Schedule of Values & Retainage Guide

Progress billing is the standard invoicing methodology for multi-month construction, commercial engineering, and large renovation projects. Rather than waiting for a job to conclude to submit a massive bill, contractors invoice incrementally based on verified percentage-of-completion milestones.

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1. How a Schedule of Values (SOV) Works

Before breaking ground, the general contractor and project owner establish a Schedule of Values—an itemized matrix dividing the total contract into distinct trade phases: - Phase 1: Site clearing and foundation ($25,000) - Phase 2: Structural framing and trusses ($45,000) - Phase 3: Plumbing, electrical, and HVAC rough-ins ($38,000) - Phase 4: Insulation and drywall ($22,000) - Phase 5: Interior trim, paint, and fixtures ($30,000)

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2. Calculating Percentage of Completion & Retainage

In each monthly billing cycle, the contractor evaluates progress per phase: - Total work completed to date minus previously billed amounts equals current period earnings. - Retainage (typically 5% to 10%) is deducted from each progress payment and held by the property owner until final inspection and lien release.

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Frequently Asked Questions

What is a Schedule of Values (SOV)?

A Schedule of Values is an itemized breakdown of the entire construction project into line-item phases (e.g. framing, electrical, drywall, fixtures) with corresponding dollar amounts.

What is retainage withholding on commercial construction billing?

Retainage is a contractually agreed percentage (usually 5% to 10%) held back by the project owner until the entire job is substantially completed and inspected.

How does a Schedule of Values simplify progress invoicing?

A Schedule of Values assigns a predetermined dollar value to each project trade milestone, making percentage-of-completion calculations objective and undisputed.

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