How Hedberg Progress Billing Works
The process starts with an approved customer order or project agreement that defines the total value, billing milestones, and conditions for invoicing. Each milestone must be supported by the relevant order, delivery, installation, or service information. Once the required work or contractual condition is verified, the dealership prepares a billing transaction for the authorized amount and updates the customer’s account.
- Establish the contract value: Confirm the approved scope, item pricing, services, discounts, taxes, and payment terms.
- Define billing stages: Identify deposits, delivery milestones, installation completion, or other agreed billing events.
- Verify milestone completion: Check supporting records and obtain required approvals before billing.
- Calculate the amount due: Apply the contract’s milestone percentage or fixed amount, accounting for prior invoices and authorized adjustments.
- Issue and record the invoice: Create the billing record, update accounts receivable, and track the remaining unbilled value.
A progress billing schedule should make each stage traceable to the original agreement. The team should also confirm how taxes, deposits, credits, and changes to the order affect each invoice under the configured business rules.
Calculating Progress Billing Amounts
When a contract uses percentage-based milestones, the gross amount for a stage can be calculated by multiplying the agreed contract value by the milestone percentage. Previous billings and applicable adjustments must then be considered to determine the amount currently invoiceable.
Example: Assume a dealership has an approved project value of $50,000 before tax. The agreement allows 30% billing after delivery and 40% after installation. The delivery milestone supports a gross billing amount of $15,000 ($50,000 × 30%). Once installation is completed, the next milestone supports $20,000 ($50,000 × 40%). The cumulative gross billing after both stages is $35,000, leaving $15,000 of the contract value for the remaining milestone, assuming no changes or other adjustments.
This calculation describes the contractual billing schedule; it does not by itself determine revenue recognition. Finance teams should apply the organization’s accounting policies and applicable standards to decide when revenue is recognized, particularly when billing dates and performance obligations do not coincide.
Billing Records and Financial Controls
A Billing System coordinates customer, order, pricing, milestone, and invoice information so that each stage can be billed according to the agreed terms. For progress billing, the system should help distinguish the total contract value, previously billed amounts, the current milestone, and the remaining amount eligible for billing.
Each Billing Document should identify the customer and project, describe the milestone or work covered, show the amount charged, and include relevant invoice dates and payment terms. Supporting records may include delivery confirmations, installation sign-offs, approved change orders, or customer acceptance documentation.
Billing Verification checks that the milestone has been reached, the calculation follows the agreement, and prior invoices are accounted for. Teams should also verify approved changes, credits, deposits, and tax treatment before posting. These controls create a reliable audit trail and help prevent duplicate billing across project stages.
Managing Receivables and Cash Flow
Progress billing can improve cash visibility by spreading customer invoices across agreed stages rather than concentrating all billing at the end of a project. However, issuing an invoice does not guarantee immediate collection, so finance teams should monitor due dates, customer disputes, and outstanding balances at each stage.
The cash application process matches incoming payments to the correct progress invoices, including cases where a customer pays several invoices together or makes a partial payment. After invoice issuance, collections workflows can prioritize reminders, record promises to pay, and coordinate resolution of disputed milestone charges. AR Automation Software can support follow-ups and payment-to-invoice matching, while keeping teams informed about overdue balances.
Accurate milestone schedules also help finance teams forecast expected receipts and identify projects where completed work has not yet been billed. Regular review of unbilled work, overdue invoices, and remaining contract value gives management a clearer view of working capital requirements.
Automation and System Integration
Progress billing workflows may involve order data, milestone evidence, customer documents, approvals, invoice creation, and accounting updates. The Hyperbots Platform supports finance automation through document processing and ERP integration, while integrations can help synchronize relevant information across sales, billing, and financial systems. Any implementation should preserve the relationship between the original agreement, supporting evidence, issued invoices, and subsequent payments.
For teams evaluating invoice capture, extraction, validation, approval, and posting capabilities, Invoice Software 2025: AI-Ready AP & Billing Guide. provides a broader comparison of invoice-processing approaches. The article Sync Sales to Cash explores how CRM and invoicing systems can connect sales commitments with billing workflows, helping businesses keep project and customer information aligned.
Summary
Hedberg Progress Billing supports staged invoicing for customer projects based on agreed percentages, fixed amounts, or completed milestones. Effective management requires a clear billing schedule, verified completion evidence, accurate calculations, and careful tracking of previous invoices and remaining contract value. When these controls are connected with receivables monitoring, payment allocation, and financial reporting, dealerships gain better visibility into project billing and expected cash receipts.