A progress payment is a payment of part of the price when a defined stage of the work is done. Instead of one bill at the end, a longer job is split into stages, each with its share of the price, and each is invoiced or claimed as it is reached. Stages should be tied to work that can be seen and checked, such as footings poured, frame up, roof on or fit-off complete, rather than to dates, because a date can arrive before the work does. Each payment should roughly match the value of the work done to that point, so that at no stage is either side far out of pocket.
On domestic building work, several states regulate progress payments, for example by requiring them to relate to work actually completed, and some set standard stages for certain kinds of contract. In commercial construction, every state and territory has a security of payment law that gives contractors a right to progress payments and a quick process for resolving disputed claims; whether those laws cover work done for a homeowner varies by state. Check with your state's building or fair trading body for the rules that apply to your jobs.
In practice
A builder quotes a $16,500 deck with four payments: a deposit of 5 per cent, $825, on acceptance; 35 per cent, $5,775, when the footings and bearers are in; 40 per cent, $6,600, when the decking is laid; and the final 20 per cent, $3,300, at completion. Each stage is something the owner can walk out and look at. At the worst moment, just before decking is finished, the builder has spent on timber and labour and has been paid for the frame, but not for the boards. With one payment at the end, the builder would be carrying the whole job.
Write the stages into the quote, with the percentage and the dollar figure, so the customer agrees to the schedule when they agree to the price. Then invoice each stage the day it is reached.
In Quote Desk
Quote Desk takes no payments and sends no progress claims. Set out each stage, its share and its amount in the note, so the payment schedule is accepted along with the price, and claim each stage from your usual invoicing. The builders page shows payment terms written into a note.