Progress billing that runs on cycle, in every owner’s format.

Construction progress billing is invoicing for work in progress: instead of one invoice at completion, the contractor bills the owner at regular intervals — usually monthly — for work completed and materials in place, less a retained percentage held until closeout. Each bill is measured against the contract’s schedule of values, so payment follows the job and the contractor is not financing the work. On the financial statements, cumulative progress billings are set against costs incurred to show whether a job is over- or under-billed.

Milestone billing is progress billing with a different measuring stick. Under a percent-complete method, each bill reflects the share of the contract completed in the period, measured against the schedule of values. Under milestone billing, amounts become billable only when a defined event is reached — a passed inspection, a delivered phase, a signed acceptance. Both bill against the same contract; what differs is the trigger and the evidence each bill has to carry.

AIA billing is a standard format for progress billing, not a different process. Progress billing is the cycle: billing the owner periodically for work in place against the schedule of values. AIA billing runs that cycle on the AIA-style G702 application and G703 continuation sheet, with defined lines for change orders, stored materials, and retainage. Many owners expect the AIA format even when the contract is not an AIA document — the billing rules still come from the contract.

It is the accounting term for over-billing: cumulative progress billings on a job exceed the costs incurred plus recognized profit to date, and the difference sits on the balance sheet as a liability. The opposite — costs in excess of billings — is under-billing, an asset. Both surface on the WIP schedule, which is why over- or under-billing is usually discovered there instead of in the period it happened.

Monthly is the norm on commercial work — one pay application per period, on the cutoff date the contract specifies. The contract controls: some owners fix a cutoff with payment due a set number of days later, and a bill that misses the cutoff can slide into the next cycle. Whatever the cadence, the discipline that matters is billing on cycle every period — a bill out days late is cash that arrives weeks later.