[{"data":1,"prerenderedAt":1212},["ShallowReactive",2],{"page-\u002Fhow-to-write-a-receipt":3,"related-\u002Fhow-to-write-a-receipt":256},{"id":4,"title":5,"author":6,"body":7,"category":242,"date":243,"dek":244,"description":245,"extension":246,"featured":247,"meta":248,"navigation":249,"path":250,"readingTime":251,"seo":252,"sitemap":253,"stem":254,"__hash__":255},"content\u002Fhow-to-write-a-receipt.md","How to Write a Receipt (What to Include + Free Template)","Daniel Reed",{"type":8,"value":9,"toc":225},"minimark",[10,15,19,28,32,35,76,79,83,86,128,131,135,138,141,144,147,151,154,172,176,179,182,186,199,203,208,211,215,218,222],[11,12,14],"h2",{"id":13},"does-a-receipt-need-to-be-complicated","Does a receipt need to be complicated?",[16,17,18],"p",{},"No — a receipt has one job: prove that payment happened. You issue it after the customer pays, and it confirms how much they paid, for what, and when. That's the whole point. It closes the loop on a transaction that an invoice opened.",[16,20,21,22,27],{},"This is the opposite end of the process from an invoice. An invoice requests payment; a receipt acknowledges it. The two often cover the same sale, just at different moments. Our guide on ",[23,24,26],"a",{"href":25},"\u002Finvoice-vs-receipt","invoices vs receipts"," goes deeper on the distinction. For a sale paid immediately on the spot, a single document can do both jobs at once — which is why a till receipt is often all that changes hands at a shop or market stall. For credit sales, where you bill now and collect later, you still want both: the invoice requests the money and the receipt confirms it arrived.",[11,29,31],{"id":30},"what-to-include-on-a-receipt","What to include on a receipt",[16,33,34],{},"A receipt is simpler than an invoice, but it still needs the essentials to stand up as a proper record:",[36,37,38,46,52,58,64,70],"ul",{},[39,40,41,45],"li",{},[42,43,44],"strong",{},"Your business name and contact details."," If you're a sole trader, your name.",[39,47,48,51],{},[42,49,50],{},"Receipt number and date."," A unique reference and the date payment was received.",[39,53,54,57],{},[42,55,56],{},"What was paid for."," A short description of the goods or services.",[39,59,60,63],{},[42,61,62],{},"Amount paid."," The total received, plus any tax shown separately if you're registered.",[39,65,66,69],{},[42,67,68],{},"Payment method."," Cash, card, bank transfer — useful for both parties' records.",[39,71,72,75],{},[42,73,74],{},"Reference to the invoice."," If the payment settled an invoice, note its number.",[16,77,78],{},"If you took only part of the amount, mark the receipt as a part payment and note the balance still outstanding so there's no confusion later.",[11,80,82],{"id":81},"a-worked-example","A worked example",[16,84,85],{},"Say you run a small garden-maintenance business and a customer pays £180 in cash for a one-off tidy-up that you'd already invoiced. A clean receipt for that looks like this:",[36,87,88,98,104,110,116,122],{},[39,89,90,93,94],{},[42,91,92],{},"Green Acres Garden Care"," — 14 Elm Road, Bristol — ",[23,95,97],{"href":96},"mailto:hello@greenacres.example","hello@greenacres.example",[39,99,100,103],{},[42,101,102],{},"Receipt #REC-0042"," — issued 22 June 2026",[39,105,106,109],{},[42,107,108],{},"For:"," One-off garden clearance and hedge trim",[39,111,112,115],{},[42,113,114],{},"Amount paid:"," £180.00 (paid in full)",[39,117,118,121],{},[42,119,120],{},"Payment method:"," Cash",[39,123,124,127],{},[42,125,126],{},"Settles:"," Invoice #INV-0118",[16,129,130],{},"Six fields, thirty seconds, and both of you now have matching records. If that same customer had paid £100 and owed £80 more, you'd change \"paid in full\" to \"Part payment — £80.00 balance outstanding, due 6 July 2026.\" The receipt should never leave a reader guessing about whether the deal is fully settled.",[11,132,134],{"id":133},"receipts-and-tax","Receipts and tax",[16,136,137],{},"For most small businesses a receipt is proof-of-payment, while the formal tax document is more often the invoice or tax invoice. There are wrinkles worth knowing, though.",[16,139,140],{},"If you're registered for VAT or GST, the tax is normally documented on the invoice or tax invoice rather than the receipt — though in some retail or point-of-sale contexts a receipt can also serve as the tax document. A receipt that shows tax separately is fine and often helpful, but check what your country treats as the formal tax document for your type of sale. When in doubt, your local tax authority's guidance is the reference.",[16,142,143],{},"Either way, keep copies of the receipts you issue and receive. They're part of the paper trail that supports your bookkeeping and any expense claims. Retention periods vary by country: broadly at least 3 years in the US, 5 years in Australia, and 6 years in the UK and Canada.",[16,145,146],{},"Always issue a receipt for cash payments. Cash often leaves no bank trail, so for the customer a receipt is usually the clearest proof the payment happened. Issue a numbered cash receipt showing the amount, date, and what it was for, and keep a copy for your own records.",[11,148,150],{"id":149},"common-receipt-types","Common receipt types",[16,152,153],{},"The same basic format covers most needs, with small tweaks:",[16,155,156,159,160,163,164,167,168,171],{},[42,157,158],{},"Cash receipt"," — confirms a cash payment; especially worth issuing since cash often leaves no bank trail. ",[42,161,162],{},"Rent receipt"," — confirms a tenant's payment, usually with the period it covers. ",[42,165,166],{},"Donation receipt"," — acknowledges a gift, sometimes needed for the donor's tax records. ",[42,169,170],{},"Sales receipt"," — the everyday point-of-sale proof of purchase. In each case the core fields are the same; you just adjust the description and any period covered.",[11,173,175],{"id":174},"paper-or-digital","Paper or digital?",[16,177,178],{},"Either is valid in all the major English-speaking jurisdictions. A PDF emailed to the customer, a photo of a handwritten slip, or a printed till receipt all count as records, provided they show the same core fields. Digital has the edge for one practical reason: it's much harder to lose at tax time. Keep a copy of every receipt you issue in a dated folder (by year, then by customer or month), and the annual scramble to reconcile your books mostly disappears.",[16,180,181],{},"If you do hand-write receipts from a duplicate book, keep the carbon copy. That copy is your record; the top sheet is the customer's. For card and bank payments, the processor's statement is a useful backup, but it isn't a substitute for a proper receipt — it shows the money moved, not what it was for.",[11,183,185],{"id":184},"issuing-a-receipt-quickly","Issuing a receipt quickly",[16,187,188,189,193,194,198],{},"You don't need separate software. Adapt one of our templates: change the heading to \"Receipt\", give it a receipt number, and show the amount paid, the date, and the payment method. Start from the ",[23,190,192],{"href":191},"\u002Ftools\u002Finvoice-generator","generator"," or an ",[23,195,197],{"href":196},"\u002Fcategory\u002Ftemplates-tools","industry template"," and download a clean PDF to send or print.",[11,200,202],{"id":201},"questions-worth-knowing-the-answer-to","Questions worth knowing the answer to",[204,205,207],"h3",{"id":206},"what-should-a-receipt-include","What should a receipt include?",[16,209,210],{},"Your business name and contact details, a unique receipt number and the date paid, a short description of what was purchased, the amount paid (with tax shown separately if you're registered), the payment method, and a reference to the invoice if the payment settled one.",[204,212,214],{"id":213},"is-a-receipt-a-legal-or-tax-document","Is a receipt a legal or tax document?",[16,216,217],{},"A receipt is usually proof of payment, while the formal tax document is more often the invoice or tax invoice. In some retail or point-of-sale contexts a receipt can also serve as the tax record. Check what your country treats as the formal tax document for your type of sale, and keep copies either way.",[204,219,221],{"id":220},"can-a-receipt-double-as-an-invoice","Can a receipt double as an invoice?",[16,223,224],{},"For a sale paid on the spot, yes — a single document can request and confirm payment at once, which is why a till receipt is often all that changes hands. For credit sales, where you bill now and get paid later, keep the two separate: the invoice requests the money and the receipt confirms it arrived.",{"title":226,"searchDepth":227,"depth":227,"links":228},"",3,[229,231,232,233,234,235,236,237],{"id":13,"depth":230,"text":14},2,{"id":30,"depth":230,"text":31},{"id":81,"depth":230,"text":82},{"id":133,"depth":230,"text":134},{"id":149,"depth":230,"text":150},{"id":174,"depth":230,"text":175},{"id":184,"depth":230,"text":185},{"id":201,"depth":230,"text":202,"children":238},[239,240,241],{"id":206,"depth":227,"text":207},{"id":213,"depth":227,"text":214},{"id":220,"depth":227,"text":221},"Document Types","2026-06-06",null,"What a receipt is, how it differs from an invoice, exactly what to include, and how to issue one quickly for cash, card, or bank payments.","md",false,{},true,"\u002Fhow-to-write-a-receipt","9 min read",{"title":5,"description":245},{"loc":250},"how-to-write-a-receipt","bDTyUy1-Xm4Sa3Iw6nae7Jj0HJVzEtlRZoIyz_g3N8g",[257,697],{"id":258,"title":259,"author":6,"body":260,"category":687,"date":688,"dek":244,"description":689,"extension":246,"featured":247,"meta":690,"navigation":249,"path":691,"readingTime":692,"seo":693,"sitemap":694,"stem":695,"__hash__":696},"content\u002Fhow-to-bill-clients-for-expenses.md","How to Bill Clients for Expenses: Reimbursable Expenses on Invoices",{"type":8,"value":261,"toc":674},[262,266,269,277,280,284,287,300,303,323,326,330,333,339,345,352,355,359,362,367,504,510,513,521,525,536,540,555,565,578,582,590,594,607,618,622,629,632,636,671],[11,263,265],{"id":264},"what-counts-as-a-reimbursable-expense-and-what-doesnt","What counts as a reimbursable expense (and what doesn't)",[16,267,268],{},"A reimbursable expense is a cost you incur on a project that the client has agreed to pay back. You front the money, then recharge it. Classic examples: a train fare to a client site, a stock photo licence bought for their brochure, a domain and hosting plan set up in their name, or a specialist subcontractor you hired to finish part of the job.",[16,270,271,272,276],{},"What is ",[273,274,275],"em",{},"not"," reimbursable is your ordinary cost of being in business. Your laptop, your accounting software subscription, your home office internet, your professional insurance — those are overhead. You recover them through your rate, not by itemising them on a client invoice. The line matters because clients push back hard when they see costs they consider \"your problem\" appearing on a bill.",[16,278,279],{},"The cleanest test: would this cost exist if the project didn't? A flight booked specifically for one client's workshop fails the \"would exist anyway\" test, so it's reimbursable. Your Adobe subscription would exist regardless, so it's overhead.",[11,281,283],{"id":282},"agree-the-rules-before-you-spend-a-penny","Agree the rules before you spend a penny",[16,285,286],{},"Most expense disputes are really scope disputes that surfaced late. Kill them in the contract or proposal. A short clause is enough:",[288,289,290],"blockquote",{},[16,291,292],{},[273,293,294,295,299],{},"Expenses: The Client will reimburse pre-approved out-of-pocket costs incurred on this project, including travel, accommodation, third-party software licences, and subcontractor fees. Costs above $150 per item require written approval in advance. Expenses are billed at cost and supported by receipts. Mileage is charged at ",[296,297,298],"span",{},"rate"," per mile.",[16,301,302],{},"Three things that clause does for you:",[36,304,305,311,317],{},[39,306,307,310],{},[42,308,309],{},"Sets an approval threshold."," Anything above the limit needs a yes in writing. Below it, you're covered to just spend and recharge.",[39,312,313,316],{},[42,314,315],{},"States the markup policy up front"," (here, \"at cost\" — no markup). Decide this deliberately; more on markup below.",[39,318,319,322],{},[42,320,321],{},"Requires receipts",", which signals you'll keep clean records and pre-empts the \"can you prove that?\" conversation.",[16,324,325],{},"Get the client to confirm expensive items by email before you commit. A one-line \"Booking the Tuesday flight at £142, confirming that's approved\" costs you nothing and turns a possible fight into a paper trail.",[11,327,329],{"id":328},"to-mark-up-or-not-to-mark-up","To mark up or not to mark up",[16,331,332],{},"There are two honest positions, and clients treat them very differently.",[16,334,335,338],{},[42,336,337],{},"Billing at cost (pass-through)."," You recharge exactly what you paid. A £142 flight becomes a £142 line. This is the norm for genuine third-party disbursements and it builds trust because there's nothing to argue about. The downside: you carry the cash-flow burden and admin for free.",[16,340,341,344],{},[42,342,343],{},"Adding a handling markup."," Some agencies add 10–20% to expenses to cover the time spent booking, coordinating, and financing the cost. This is legitimate as long as it's disclosed. What damages relationships is a hidden markup a client discovers by seeing the original receipt. If you mark up, either state the percentage in your contract or fold the handling into a separate \"coordination fee\" line rather than inflating the receipt total.",[16,346,347,348,351],{},"A middle path many freelancers use: pass genuine disbursements through at cost, but bill your own ",[273,349,350],{},"time"," spent managing a subcontractor or sourcing materials as normal billable hours. That keeps the expense honest and still pays you for the work.",[16,353,354],{},"For mileage, use your tax authority's standard rate as a defensible number rather than guessing. In the US the IRS sets an annual business mileage rate; the UK uses HMRC approved mileage allowance payments (commonly quoted as 45p per mile for the first 10,000 miles); Canada and Australia publish their own per-kilometre figures. These change, so check the current rate for your country each tax year.",[11,356,358],{"id":357},"how-to-list-expenses-on-the-invoice","How to list expenses on the invoice",[16,360,361],{},"Keep expenses visually distinct from your fees. Clients scan invoices, and burying a £600 subcontractor cost inside your service total invites suspicion. Two structures work well.",[16,363,364],{},[42,365,366],{},"Option A — a dedicated expenses block:",[368,369,370,389],"table",{},[371,372,373],"thead",{},[374,375,376,380,383,386],"tr",{},[377,378,379],"th",{},"Description",[377,381,382],{},"Qty",[377,384,385],{},"Rate",[377,387,388],{},"Amount",[390,391,392,407,420,433,445,457,472,488],"tbody",{},[374,393,394,398,401,404],{},[395,396,397],"td",{},"Web design services (June)",[395,399,400],{},"22 hrs",[395,402,403],{},"$85",[395,405,406],{},"$1,870.00",[374,408,409,414,416,418],{},[395,410,411],{},[42,412,413],{},"Reimbursable expenses",[395,415],{},[395,417],{},[395,419],{},[374,421,422,425,428,431],{},[395,423,424],{},"Stock photography licence (invoice #A-2231)",[395,426,427],{},"1",[395,429,430],{},"$79.00",[395,432,430],{},[374,434,435,438,440,443],{},[395,436,437],{},"Return train fare, London↔Bristol (12 Jun)",[395,439,427],{},[395,441,442],{},"$64.00",[395,444,442],{},[374,446,447,450,452,455],{},[395,448,449],{},"Subcontractor: copywriting (J. Okafor)",[395,451,427],{},[395,453,454],{},"$450.00",[395,456,454],{},[374,458,459,464,466,468],{},[395,460,461],{},[42,462,463],{},"Subtotal — services",[395,465],{},[395,467],{},[395,469,470],{},[42,471,406],{},[374,473,474,479,481,483],{},[395,475,476],{},[42,477,478],{},"Subtotal — expenses",[395,480],{},[395,482],{},[395,484,485],{},[42,486,487],{},"$593.00",[374,489,490,495,497,499],{},[395,491,492],{},[42,493,494],{},"Total",[395,496],{},[395,498],{},[395,500,501],{},[42,502,503],{},"$2,463.00",[16,505,506,509],{},[42,507,508],{},"Option B — a separate expenses invoice"," entirely, cross-referenced to the project. Useful when expenses are large or arrive on a different timeline than your fees, and when a client's accounts team codes reimbursements to a different budget.",[16,511,512],{},"Either way, name the specific supplier, date, and purpose on each line. \"Travel — $64\" is weak. \"Return train fare, London↔Bristol, 12 Jun client workshop — $64\" gets approved without a follow-up email. Attach the underlying receipts as a PDF; don't wait to be asked.",[16,514,515,516,520],{},"If you're building invoices by hand, the layout principles in ",[23,517,519],{"href":518},"\u002Fhow-to-make-an-invoice-in-excel-word-google-docs","how to make an invoice in Excel, Word or Google Docs"," apply here too — a clean expenses subtotal is just another block.",[11,522,524],{"id":523},"the-vat-and-sales-tax-part-people-get-wrong","The VAT and sales-tax part people get wrong",[16,526,527,528,531,532,535],{},"This is where recharging expenses gets genuinely technical, and the rules differ by tax and by country. Two concepts get confused constantly: ",[42,529,530],{},"recharges"," and ",[42,533,534],{},"disbursements",".",[204,537,539],{"id":538},"recharges-vs-disbursements-vat-registered-businesses","Recharges vs disbursements (VAT-registered businesses)",[16,541,542,543,546,547,550,551,554],{},"A ",[42,544,545],{},"recharge"," is a cost you incurred ",[273,548,549],{},"for your own business"," in order to deliver the service, which you then pass on. Your train fare to a client meeting is your cost — you bought the ticket, you travelled. When you recharge it, it becomes part of the consideration for your service, so in the UK and similar VAT systems you generally add VAT to it at your service rate, ",[273,552,553],{},"even if the original ticket was zero-rated or VAT-exempt",". That surprises people: a zero-rated train fare recharged to a client typically gets 20% VAT added because it's now part of your taxable supply.",[16,556,542,557,560,561,564],{},[42,558,559],{},"disbursement"," is a cost you paid ",[273,562,563],{},"as the client's agent"," — the goods or services were supplied to the client, not to you, and you merely handled the payment. A statutory fee (say, a companies-registry filing fee paid on the client's behalf) can qualify. Disbursements are passed on at exact cost with no VAT added by you, but they must meet strict conditions: the client received the supply, you were acting as their agent, and you show the cost separately. Getting this wrong means under- or over-charging VAT.",[16,566,567,568,572,573,577],{},"Practical takeaway for UK and EU-style VAT: most of what freelancers call \"expenses\" are actually recharges, not disbursements, so you add VAT. Read ",[23,569,571],{"href":570},"\u002Fuk-vat-invoices-explained","UK VAT invoices explained"," and, if you're near the threshold, ",[23,574,576],{"href":575},"\u002Fdo-i-need-to-register-for-vat","do I need to register for VAT",". Rules vary — confirm your specific situation with HMRC or an accountant.",[204,579,581],{"id":580},"us-sales-tax","US sales tax",[16,583,584,585,589],{},"Whether a reimbursed expense is taxable depends on the state and on whether the underlying item was taxable and how it's characterised. Reimbursed costs that are part of a bundled taxable service can be taxable; a separately stated pass-through of a non-taxable item may not be. There's no single national rule. The overview in ",[23,586,588],{"href":587},"\u002Fus-sales-tax-on-invoices","US sales tax on invoices"," is a starting point, but check your state.",[204,591,593],{"id":592},"canada-and-australia","Canada and Australia",[16,595,596,597,601,602,606],{},"For GST\u002FHST in Canada, recharged expenses generally follow the tax treatment of your overall supply; see ",[23,598,600],{"href":599},"\u002Fcanada-gst-hst-invoice-requirements","Canada GST\u002FHST invoice requirements",". In Australia, GST on reimbursements versus true disbursements follows a similar agent-vs-principal logic to the UK; a valid ",[23,603,605],{"href":604},"\u002Fwhat-is-a-tax-invoice-australia","tax invoice"," still needs the right GST breakdown.",[16,608,609,610,613,614,617],{},"One more trap: ",[42,611,612],{},"don't double-count VAT\u002FGST you've already reclaimed."," If you're VAT-registered and reclaimed the input tax on that £79 stock photo, you recharge the £79 net (pre-VAT) figure and add your own VAT on top. Recharging the VAT-inclusive amount ",[273,615,616],{},"and"," adding VAT again overcharges the client.",[11,619,621],{"id":620},"keep-the-receipts-and-keep-them-findable","Keep the receipts, and keep them findable",[16,623,624,625,535],{},"Every recharged cost needs a supporting document you can produce on demand: the supplier invoice, the ticket, the mileage log. Tax authorities can ask you to justify both the expense you claimed and the amount you recharged. Retention periods vary (commonly several years), so store them with the project. The practical mechanics are covered in ",[23,626,628],{"href":627},"\u002Fhow-long-to-keep-invoices-and-receipts","how long to keep invoices and receipts",[16,630,631],{},"A simple system: create a folder per project, drop every receipt in as you incur it, and log the date, supplier, amount, and whether tax was charged in a spreadsheet. When invoice day arrives the expenses block writes itself.",[11,633,635],{"id":634},"handling-the-awkward-cases","Handling the awkward cases",[36,637,638,644,654,665],{},[39,639,640,643],{},[42,641,642],{},"The client rejects an expense after the fact."," If it was under your approval threshold and inside the contract's categories, point to the clause. If it was over the threshold and you didn't get sign-off, you may have to eat it — which is exactly why the threshold exists.",[39,645,646,649,650,653],{},[42,647,648],{},"A subcontractor you're recharging."," You're the principal: you hired them, you pay them, you recharge the client. Their invoice is addressed to ",[273,651,652],{},"you",", and you issue your own invoice to the client. Don't just forward the sub's invoice.",[39,655,656,659,660,664],{},[42,657,658],{},"Foreign-currency expenses on an overseas project."," Convert at the rate on the date you paid, note the rate, and be consistent. ",[23,661,663],{"href":662},"\u002Fhow-to-invoice-international-clients","Invoicing international clients"," covers the currency and payment side.",[39,666,667,670],{},[42,668,669],{},"Expenses that arrive after final payment."," Bill them promptly on a short-dated invoice rather than sitting on them. A late \"oh, and there's also £200 of expenses\" three months on reads as disorganised and gets queried.",[16,672,673],{},"Recharging expenses well is mostly about being boringly transparent: agree the rules in writing, spend inside the agreed limits, itemise clearly, attach the receipts, and apply the right tax treatment for your jurisdiction. Do that and expenses stop being a source of friction and become just another clean line on the invoice.",{"title":226,"searchDepth":227,"depth":227,"links":675},[676,677,678,679,680,685,686],{"id":264,"depth":230,"text":265},{"id":282,"depth":230,"text":283},{"id":328,"depth":230,"text":329},{"id":357,"depth":230,"text":358},{"id":523,"depth":230,"text":524,"children":681},[682,683,684],{"id":538,"depth":227,"text":539},{"id":580,"depth":227,"text":581},{"id":592,"depth":227,"text":593},{"id":620,"depth":230,"text":621},{"id":634,"depth":230,"text":635},"Invoicing Basics","2026-07-29","How to recharge travel, materials, software and subcontractor costs to clients, whether to add markup, and how VAT and sales-tax rules apply.",{},"\u002Fhow-to-bill-clients-for-expenses","8 min read",{"title":259,"description":689},{"loc":691},"how-to-bill-clients-for-expenses","RpKUmFUK7kvh-_hOs2fJkgj3NKtNotmV5Fped0xpX-s",{"id":698,"title":699,"author":6,"body":700,"category":687,"date":1204,"dek":244,"description":1205,"extension":246,"featured":247,"meta":1206,"navigation":249,"path":1207,"readingTime":692,"seo":1208,"sitemap":1209,"stem":1210,"__hash__":1211},"content\u002Fwhat-is-progress-billing.md","What Is Progress Billing? How to Invoice a Project in Stages",{"type":8,"value":701,"toc":1194},[702,706,709,712,725,729,732,753,760,766,772,775,779,782,785,923,934,938,941,958,961,964,1023,1026,1034,1038,1041,1047,1063,1069,1074,1077,1083,1089,1093,1096,1101,1109,1114,1134,1137,1141,1144,1181,1185,1188,1191],[11,703,705],{"id":704},"getting-paid-before-the-project-ends","Getting paid before the project ends",[16,707,708],{},"A web build quoted at $18,000 takes four months. If you invoice once at the end, you're effectively lending the client the cost of a third of a year's work, absorbing every scope change and stall, and betting your cash flow on a single payment that may arrive 30 days after the final sign-off. That's month five before a dollar lands.",[16,710,711],{},"Progress billing fixes this. Instead of one invoice, you break the project into stages and bill for each as you complete it. The client pays as value is delivered; you fund the work as you go. It's the standard model in construction, engineering, and large creative or software projects, and it scales down neatly to a solo freelancer running a $6,000 branding job.",[16,713,714,715,719,720,724],{},"This is different from a one-off ",[23,716,718],{"href":717},"\u002Fhow-to-ask-for-a-deposit-upfront-invoices","deposit invoice"," or a fixed monthly ",[23,721,723],{"href":722},"\u002Frecurring-and-retainer-invoices","retainer",". A deposit is a single upfront payment. A retainer bills a recurring fee regardless of specific deliverables. Progress billing charges incrementally against measurable chunks of one large project as they're finished.",[11,726,728],{"id":727},"how-progress-billing-actually-works","How progress billing actually works",[16,730,731],{},"Every progress-billed project rests on three decisions you make before you start:",[733,734,735,741,747],"ol",{},[39,736,737,740],{},[42,738,739],{},"The total contract value."," The agreed price for the whole job (or a clear rate structure if it's time-and-materials).",[39,742,743,746],{},[42,744,745],{},"The billing triggers."," What event releases each invoice, a calendar date, a completed milestone, or a percentage of work done.",[39,748,749,752],{},[42,750,751],{},"The schedule of values."," A line-by-line breakdown showing how the total is split across stages.",[16,754,755,756,759],{},"Two broad methods exist for deciding ",[273,757,758],{},"when"," to bill:",[16,761,762,765],{},[42,763,764],{},"Milestone billing."," You invoice when a defined deliverable is complete: \"homepage design approved,\" \"database migration signed off.\" Best when the work has clear, discrete stages. Clients like it because they're paying for something they can see.",[16,767,768,771],{},[42,769,770],{},"Percentage-of-completion billing."," You invoice based on how much of the total work is finished, often assessed monthly. A builder might bill for 40% of a job at the end of month two. This suits long, continuous work where deliverables blur together. It requires an honest, defensible way to estimate \"percent complete,\" which is where disputes usually start.",[16,773,774],{},"Most small-business projects use milestones. They're concrete and hard to argue with.",[11,776,778],{"id":777},"building-a-schedule-of-values","Building a schedule of values",[16,780,781],{},"The schedule of values is the backbone. It's a table, agreed in the contract, that both parties reference for the life of the project. Keep the number of stages sensible: too few and you're back to lump-sum risk, too many and you drown in admin.",[16,783,784],{},"Here's a schedule for that $18,000 website, split into five stages plus a deposit:",[368,786,787,804],{},[371,788,789],{},[374,790,791,794,796,799,801],{},[377,792,793],{},"Stage",[377,795,379],{},[377,797,798],{},"% of total",[377,800,388],{},[377,802,803],{},"Trigger",[390,805,806,823,839,854,871,886,903],{},[374,807,808,811,814,817,820],{},[395,809,810],{},"0",[395,812,813],{},"Mobilisation deposit",[395,815,816],{},"20%",[395,818,819],{},"$3,600",[395,821,822],{},"On contract signing",[374,824,825,827,830,833,836],{},[395,826,427],{},[395,828,829],{},"Discovery & sitemap approved",[395,831,832],{},"15%",[395,834,835],{},"$2,700",[395,837,838],{},"Client sign-off on IA",[374,840,841,844,847,849,851],{},[395,842,843],{},"2",[395,845,846],{},"Design mockups approved",[395,848,816],{},[395,850,819],{},[395,852,853],{},"Client sign-off on designs",[374,855,856,859,862,865,868],{},[395,857,858],{},"3",[395,860,861],{},"Development complete (staging)",[395,863,864],{},"25%",[395,866,867],{},"$4,500",[395,869,870],{},"Site live on staging server",[374,872,873,876,879,881,883],{},[395,874,875],{},"4",[395,877,878],{},"Testing, revisions, launch",[395,880,832],{},[395,882,835],{},[395,884,885],{},"Site live on production",[374,887,888,891,894,897,900],{},[395,889,890],{},"5",[395,892,893],{},"Retention release",[395,895,896],{},"5%",[395,898,899],{},"$900",[395,901,902],{},"30 days after launch, no defects",[374,904,905,907,911,916,921],{},[395,906],{},[395,908,909],{},[42,910,494],{},[395,912,913],{},[42,914,915],{},"100%",[395,917,918],{},[42,919,920],{},"$18,000",[395,922],{},[16,924,925,926,929,930,933],{},"Notice stage 5. That's ",[42,927,928],{},"retainage"," (also called retention), a slice of the total held back until after final delivery to guarantee you fix defects. It's ingrained in construction, where 5–10% is typical, and it's increasingly reasonable for larger creative and software work. As the contractor being billed ",[273,931,932],{},"against",", you want retainage low and released quickly; as the party doing the work, you accept it because it reassures a nervous client. State the release condition precisely: \"5% retained, payable 30 days after production launch provided no critical defects remain open.\"",[11,935,937],{"id":936},"what-goes-on-each-progress-invoice","What goes on each progress invoice",[16,939,940],{},"A progress invoice looks like a normal invoice with a few extra fields that show where this payment sits in the bigger picture. Every one should show:",[36,942,943,946,949,952,955],{},[39,944,945],{},"The overall contract value",[39,947,948],{},"This stage's amount (the \"current claim\")",[39,950,951],{},"Total billed to date, including this invoice",[39,953,954],{},"Total remaining after this invoice",[39,956,957],{},"Any retainage held",[16,959,960],{},"That running tally prevents the most common progress-billing argument: the client losing track of what they've already paid.",[16,962,963],{},"Here's how a stage 2 invoice might read:",[288,965,966,972,1013,1020],{},[16,967,968,971],{},[42,969,970],{},"Invoice #2026-034","\nProject: Website redesign — Contract value $18,000",[368,973,974,983],{},[371,975,976],{},[374,977,978,981],{},[377,979,980],{},"Line item",[377,982,388],{},[390,984,985,993,1001],{},[374,986,987,990],{},[395,988,989],{},"Stage 2: Design mockups approved (20% of contract)",[395,991,992],{},"$3,600.00",[374,994,995,998],{},[395,996,997],{},"Less retainage (5% of this claim)",[395,999,1000],{},"–$180.00",[374,1002,1003,1008],{},[395,1004,1005],{},[42,1006,1007],{},"Amount due this invoice",[395,1009,1010],{},[42,1011,1012],{},"$3,420.00",[16,1014,1015,1016,1019],{},"Contract value: $18,000.00\nPreviously billed (stages 0–1): $6,300.00\nThis claim: $3,600.00\n",[42,1017,1018],{},"Billed to date: $9,900.00 (55%)","\nRetainage held to date: $495.00\nRemaining to bill: $8,100.00",[16,1021,1022],{},"Payment terms: Net 14. Work on stage 3 begins on receipt.",[16,1024,1025],{},"Whether you deduct retainage from each claim or hold it all in a final stage is a style choice; both are fine as long as the contract and the invoice math agree. Deducting a little from each claim (as above) is cleaner because the client always sees the running retention figure.",[16,1027,1028,1029,1033],{},"Number your invoices in a consistent sequence so the project's billing history is auditable. If you juggle several clients, see ",[23,1030,1032],{"href":1031},"\u002Finvoice-numbering-best-practices","invoice numbering best practices"," for a scheme that won't collapse under multiple projects.",[11,1035,1037],{"id":1036},"contract-wording-that-protects-you","Contract wording that protects you",[16,1039,1040],{},"Progress billing lives or dies by what's written before work starts. The schedule of values belongs in the signed contract or statement of work, not buried in an email. Include clauses covering:",[16,1042,1043,1046],{},[42,1044,1045],{},"The trigger definition."," Vague triggers cause disputes. \"Design phase complete\" invites argument; \"Client provides written approval of homepage and two interior page mockups via email or project tool\" does not.",[16,1048,1049,1052,1053,1057,1058,1062],{},[42,1050,1051],{},"Payment terms per stage."," Short terms suit staged work. Net 7 to Net 14 is common; some freelancers use ",[23,1054,1056],{"href":1055},"\u002Fdue-on-receipt-payment-terms","due on receipt"," for deposits and early stages. Whatever you pick, spell out your ",[23,1059,1061],{"href":1060},"\u002Fhow-to-charge-late-fees-on-overdue-invoices","late fee"," policy too.",[16,1064,1065,1068],{},[42,1066,1067],{},"A stop-work clause."," The single most valuable line in a progress-billing contract:",[288,1070,1071],{},[16,1072,1073],{},"\"Work on the subsequent stage will not commence until payment for the preceding stage has been received in full. Timelines extend automatically by any period of delayed payment.\"",[16,1075,1076],{},"This turns your invoice into a gate. No payment, no progress. It's the natural leverage staged billing gives you, and it beats chasing an $18,000 balance at the end.",[16,1078,1079,1082],{},[42,1080,1081],{},"Scope-change handling."," When the client adds work mid-project, don't quietly absorb it into an existing stage. Issue a change order that adjusts the contract value and, if needed, adds a stage. Revised schedule of values, signed, then carry on.",[16,1084,1085,1088],{},[42,1086,1087],{},"Deposit and retainage terms."," State the deposit amount, whether it's refundable, and how it's applied (usually credited against stage 0 or spread across the first stages). State the retainage percentage and its precise release condition.",[11,1090,1092],{"id":1091},"a-worked-cash-flow-comparison","A worked cash-flow comparison",[16,1094,1095],{},"The point of all this is timing. Same $18,000 project, two approaches:",[16,1097,1098],{},[42,1099,1100],{},"Lump-sum, Net 30, invoiced at completion (month 4):",[36,1102,1103,1106],{},[39,1104,1105],{},"Cash in: $0 until roughly day 150",[39,1107,1108],{},"You self-fund four months of work",[16,1110,1111],{},[42,1112,1113],{},"Progress-billed against the schedule above:",[36,1115,1116,1119,1122,1125,1128,1131],{},[39,1117,1118],{},"Month 0: $3,600 deposit",[39,1120,1121],{},"Month 1: $2,700 (stage 1)",[39,1123,1124],{},"Month 2: $3,420 (stage 2, net of retainage)",[39,1126,1127],{},"Month 3: $4,275 (stage 3, net of retainage)",[39,1129,1130],{},"Month 4: $2,565 (stage 4, net of retainage)",[39,1132,1133],{},"Month 5: $2,340 (stage 5 + accumulated retainage $900)",[16,1135,1136],{},"By the end of month 2 you've collected $9,720 on a project you're only a bit over halfway through delivering. That's the difference between a healthy freelance business and one perpetually one late invoice away from trouble.",[11,1138,1140],{"id":1139},"tax-and-record-keeping-notes","Tax and record-keeping notes",[16,1142,1143],{},"A few things to get right, and rules vary by jurisdiction, so confirm with your tax authority or an accountant:",[36,1145,1146,1166,1172],{},[39,1147,1148,1151,1152,1154,1155,1157,1158,1161,1162,1165],{},[42,1149,1150],{},"When to recognise income and charge sales tax\u002FVAT"," usually depends on when each invoice is issued or paid, not on when the whole project finishes. If you're VAT-registered in the UK, each progress invoice is generally a tax point in its own right; see ",[23,1153,571],{"href":570},". US sales tax on services varies by state, covered in ",[23,1156,588],{"href":587},". Canadian GST\u002FHST has its own ",[23,1159,1160],{"href":599},"invoice requirements",", and Australian ",[23,1163,1164],{"href":604},"tax invoices"," have set fields.",[39,1167,1168,1171],{},[42,1169,1170],{},"Deposits can be treated differently from progress claims"," for tax purposes in some jurisdictions. Don't assume they're the same.",[39,1173,1174,1177,1178,1180],{},[42,1175,1176],{},"Keep every progress invoice, change order, and sign-off email"," for the whole project and beyond. Guidance on ",[23,1179,628],{"href":627}," applies here.",[11,1182,1184],{"id":1183},"when-progress-billing-isnt-worth-it","When progress billing isn't worth it",[16,1186,1187],{},"Skip it for anything short or small. A $900 logo delivered in a week doesn't need five invoices, take a deposit and bill the balance. Progress billing carries admin overhead: more invoices, more approvals, more tracking. The break-even point is roughly a project long enough or large enough that carrying the full cost to completion would strain your cash or your nerves.",[16,1189,1190],{},"It also demands a client who signs a proper contract and approves stages promptly. If sign-offs are the bottleneck, add a clause deeming a stage approved if the client doesn't respond within, say, five business days. Otherwise your carefully staged cash flow stalls on someone else's inbox.",[16,1192,1193],{},"Structure the stages, define the triggers in writing, and let each paid invoice unlock the next slice of work. The project funds itself, and you never carry more risk than the current stage.",{"title":226,"searchDepth":227,"depth":227,"links":1195},[1196,1197,1198,1199,1200,1201,1202,1203],{"id":704,"depth":230,"text":705},{"id":727,"depth":230,"text":728},{"id":777,"depth":230,"text":778},{"id":936,"depth":230,"text":937},{"id":1036,"depth":230,"text":1037},{"id":1091,"depth":230,"text":1092},{"id":1139,"depth":230,"text":1140},{"id":1183,"depth":230,"text":1184},"2026-07-27","A practical guide to milestone and staged invoicing for freelancers and contractors, covering deposits, progress claims, retainage, and sample wording.",{},"\u002Fwhat-is-progress-billing",{"title":699,"description":1205},{"loc":1207},"what-is-progress-billing","1f7Wj81KqhhKD9NyCFT0w5kd8bObLSynWMtfQE4jWeY",1785314448907]