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Progress invoices: how to make upfront payments safe for both sides

A progress invoice bills part of the agreed sum before the full project is accepted. It protects service providers from cash-flow gaps – and protects clients from advancing large sums with nothing to show for it. This article explains the structure, how to stage payments, and an approach that keeps both sides covered.

What is a progress invoice?

With a progress invoice (also called a partial or interim invoice), you bill part of the agreed fee before the project is fully completed. The final invoice follows at the end – any progress payments already made are credited in full.

Legally, a progress invoice is a regular invoice: it needs an invoice number, date, description of the work, and tax amount. The difference is the scope: you're billing for a project stage, not the final result.

Progress payment, deposit, payment on account – the difference

In practice, these terms overlap. What matters is the safeguard: proof of the work delivered, a clear payment-term window, and a procedure for what happens if there's a dispute over a partial delivery.

  • Deposit: a flat percentage paid before the project starts, usually 30–50% (example figures, depending on the industry). Credited against the final invoice.
  • Progress payment: tied to a completed portion of the work, usually billed as milestones are reached.
  • Payment on account: the legal umbrella term for payments made against an overall service that isn't yet due.

Example: a project in three stages

Sample invoice (illustrative example project, €12,000 net):

  • Milestone 1 – Concept & wireframes: €4,000, delivered after 2 weeks
  • Milestone 2 – Design & build: €5,000, delivered after 6 weeks
  • Milestone 3 – Launch & handover: €3,000, delivered after 8 weeks

Each stage gets its own amount, deadline, and measurable acceptance criteria (e.g., "Finished design for all subpages, adapted for desktop and mobile"). That way the client knows exactly what each payment is for – and the service provider has predictable cash flow.

How to make progress payments safe for both sides

The classic sticking point: the client is asked to pay upfront but doesn't want to take on the risk. This is exactly where a milestone payment link like Stipme comes in: the client secures the budget with the payment partner Stripe – not with the service provider. The payout per milestone only happens after the delivery is approved.

  • The client secures the project budget before the start (Apple Pay, Google Pay, or card, without signing up).
  • The service provider delivers milestone by milestone and submits the result through the link.
  • The client approves with one click – or requests a revision.
  • If there's no response within 72 hours (weekends don't count), it's approved automatically (auto-release).

This doesn't replace the classic progress invoice everywhere – for long-running contracts and public-sector clients, it remains standard. For digital projects with clear scope, it's the smoothest option: no invoice spreadsheets, no outstanding items, no 60-day payment terms.

Frequently asked questions

How large can a progress payment be?+

That's freely negotiable. Example values of 25% to 50% of the project volume are common, or splitting the project into equally sized milestones. What matters is that the amount matches the corresponding stage of work, not the total.

Does VAT apply to a progress invoice?+

Yes. A progress invoice is a regular invoice – VAT is shown and credited on each progress payment. The details depend on your business structure and small-business exemption status; when in doubt, ask your tax advisor.

What if the client doesn't pay the progress amount?+

A contract clause helps: "Work on the next phase begins once the progress payment is received." If you handle payments through a payment link with a secured budget, you avoid the problem entirely: the budget already sits with the payment partner Stripe before work begins.

How do I calculate a progress payment?+

Either as a percentage of the total order value (example: 30% of €10,000 = €3,000) or as the value of the completed stage. On the final invoice, all progress payments are deducted: €10,000 − €3,000 − €4,000 = €3,000 remaining (example figures).

What's the difference between a progress payment and payment in advance?+

A progress payment covers part of the work and is usually due as the project proceeds. Payment in advance is paid before work begins at all, often for the full amount.

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General information only; not legal or tax advice.