Summary

Progress invoicing in QuickBooks Online helps businesses manage cash flow by allowing them to bill clients incrementally as work is completed, rather than waiting until the end of a project for full payment. This guide explains what progress invoicing is, how to turn it on, and the step-by-step process for creating and managing progress invoices effectively.

📊 What is progress invoicing in QuickBooks Online?

Progress invoicing, also called progress billing, is a feature in QuickBooks Online that lets you invoice clients in increments throughout a project's timeline. Instead of sending one large invoice after completing the entire job, you can request partial payments as specific milestones are met or percentages of work are completed. This approach helps keep your business's cash flow stable, especially for long-term or large-scale projects that require upfront costs for materials or labor. To use progress invoicing, you first create an estimate agreed upon with your client, then bill against that estimate over time with either percentage-based or custom-amount invoices until the project is finished and the estimate is fully paid.

Takeaways:

• Progress invoicing allows billing in portions rather than waiting for project completion.

• It helps improve cash flow during large or long-term projects.

• Requires creating an estimate first, then billing against it.

Key Terms

• Progress invoicing: Sending multiple invoices throughout a project's duration based on work completed.

• Estimate: A detailed document outlining the agreed-upon cost and scope of a project.

• Bundle item: A QuickBooks feature that groups items on an estimate or invoice to simplify client-facing details.

⚙️ How to turn on progress invoicing in QuickBooks Online

To enable progress invoicing, navigate to the Settings gear icon in QuickBooks Online. Select “Account and Settings,” then go to the “Sales” tab. Locate the “Progress Invoicing” section under “Products and services,” check the box next to “Create multiple partial invoices from a single estimate,” and click “Save.” Progress invoicing is available on Simple Start, Essentials, Plus, and Advanced plans, but these steps focus on Plus and Advanced users. Once turned on, you can create progress invoices from any active estimate in your account.

Takeaways:

• Navigate to Settings > Account and Settings > Sales to turn on progress invoicing.

• Check the option to create multiple invoices from one estimate.

• Save your settings to begin using progress invoices.

Key Terms

• Settings (gear icon): The main menu for QuickBooks Online configuration options.

• Account and Settings: The area where users customize company-wide features and preferences.

📝 Step-by-step guide to creating progress invoices

Once progress invoicing is turned on and you’ve created an estimate, start by finding the estimate under “Sales” > “All Sales.” You can create an invoice directly from the list by clicking “Create Invoice” in the Actions column, or open the estimate and select “Create Invoice” from the top right. A popup will ask if you want to invoice for the entire estimate, a percentage of each line, or a custom amount for each line item. For example, to invoice for 50% of a $3,600 estimate, input 50%, and QuickBooks will calculate the partial amount due. If you prefer custom amounts per line, select that option to enter specific charges for each part of the job. Customize your invoice layout to show project progress by adjusting options in the “Customize Invoice” window under the “Design” and “Content” tabs, such as enabling the estimate summary and showing line item progress. Save and send your invoice so clients can see their payment status. Continue creating progress invoices until the full estimate amount is billed, at which point the estimate status will change to “Closed.” If you need to adjust billing amounts beyond the original estimate, update the estimate before creating additional invoices.

Takeaways:

• Always create an estimate before starting progress invoices.

• Choose to invoice by percentage or custom amount based on project billing needs.

• Customize invoices to show clients their payment progress and project status.

• Repeat the invoicing process until the estimate is fully billed and closed.

Key Terms

• Create Invoice: The button that generates an invoice based on an existing estimate.

• Estimate summary: An invoice feature showing what has been invoiced and what remains.

• Progress invoicing popup: The window that lets you select invoice amounts for each progress invoice.

Conclusion

Progress invoicing in QuickBooks Online is a practical tool for businesses handling large projects, allowing them to maintain steady cash flow by billing clients incrementally as work progresses. With the right setup and consistent management, progress invoicing ensures you’re paid on time without waiting for final project completion, supporting both your business operations and client relationships effectively.