Billing a project: milestones, progress, retention and advances

Say the fit-out firm from our first post on projects signs a clinic reception for AED 100,000. The customer pays a 20 % advance, keeps 10 % of every invoice as retention until the work is handed over, and pays the rest as the work progresses. Done by hand, every invoice means a calculator, last month's invoices and the contract open side by side, and one mistake in the advance carries into every invoice after it.

Three ways to bill the work

Each project has a billing method, and each invoice has a kind:

• Milestone: when a phase is done, invoice its milestone amount (once per phase), or type an amount.
• Progress: type the % complete of the contract so far. The invoice bills the contract × that % less what earlier progress invoices billed. The tasks suggest a figure: the estimated hours of the done tasks over those of all the tasks.
• Time and materials: the approved billable hours × the billing rate, plus the billable costs × (1 + markup), whatever has not been billed yet. Forty approved hours at AED 150 and AED 2,000 of materials with a 10 % markup make 6,000 + 2,200 = AED 8,200.

Milestone and progress invoices together never go above the contract. Hours that are not approved are never billed, and nothing is billed twice.

Advances and retention

An advance invoice bills a typed amount ahead of the work (all the advances together stay within the contract). After that, every work invoice recovers part of it in proportion: the advances × the work on this invoice ÷ the contract.

Retention is the project's % (up to 50 %), held on every work invoice. What the customer owes now is the work less the retention less the advance recovered. At the end, a retention release invoice bills what was held, all of it or a part.

The example, invoice by invoice

The same clinic: a contract of AED 100,000, a 20 % advance, 10 % retention, billed by progress, and a shop that charges 5 % VAT. These are example figures, not a rule (amounts in AED).

Over the whole job the customer pays AED 105,000: the contract and its VAT. Before each invoice is issued, Preview shows exactly these figures.

With Books, or without

With Books on, each invoice is a Books tax invoice: numbered by Books, with the project's number as the reference and the retention and the advance recovered as deductions, so the VAT (5 % when the shop charges VAT) is on what is billed now. Payments are Books receipts, and the project reads from Books what has been paid.

Without Books, the invoice is a charge on the customer's account with the shop's VAT on the net, and payments (cash, bank transfer, card, cheque) are recorded on the project's page.

Budget against actual, and the margin

Every project, and every phase in it, shows the budget, the costs by kind, labour (the hours × each person's hourly cost), the work invoiced, what was invoiced and what was paid, the margin and the margin %. An advance is not revenue; it counts only as the work is billed. The projects list adds the totals and counts the late and over-budget projects, and the report downloads as CSV or Excel for your accountant.

Alerts, and a question from the phone

The owner gets an alert when a project passes its due date, when its costs pass the budget, when approved billable time has not been invoiced for 30 days (you can change the number in Settings → Projects), and when the retention of a finished project falls due. Ask your shop answers "how are my projects": the active ones with the budget used and the margin, the late and over-budget counts, and the retention held.

None of this is AI: every figure follows the rules above.

Projects is included in Online Restaurant and Chain, and an add-on for Online Retail at AED 49 a month before VAT, bought in Billing → Plan → "Add-on modules". It is in every 14-day trial and needs Customers; Books is optional and comes with Online Restaurant and Chain. Read the ERP page, the manual's billing section and Books.