Progress Invoicing for Trades: Stage Payments That Work

Progress invoicing for trades means splitting a long job into several invoices tied to milestones you can prove, instead of one invoice at the end. The workable pattern: agree a written payment plan in the quote before you start, tie each stage to a physical, verifiable trigger (first fix complete, board energised, handover signed) rather than a calendar date, invoice the day you hit each trigger, and settle everything against a final invoice listing every stage payment already made. Get the wording into the quote and it is routine. Bolt it on halfway through and it looks like you are asking for money you have not earned.

Two different things people call the same thing

Be clear which one you are doing, because it decides how the final invoice works.

• Delfakturering (stage invoicing). Each invoice covers work genuinely completed to that point. It stands on its own. Nothing is reversed at the end.
• Á conto (on-account payments). Each payment is a slice of the agreed contract sum drawn against a plan, not a measurement of work done. At the end you invoice the full contract value, deduct every á conto payment, and show the balance.

Outside Sweden these are called stage payments and applications for payment on account. Same mechanics, different vocabulary. For most small firms stage invoicing is the safer default: every invoice is defensible on its own, the VAT is boring, and there is no end-of-job reconciliation to get wrong. Use true á conto when you are a subcontractor on a contract that already runs that way, or when the plan is front-loaded to fund materials.

This matters more now than it did. Lead times on switchgear, heat pumps, glazing and joinery stretched and never fully came back, so ordinary domestic work runs in months. A three-month job invoiced once at the end is three months of labour and materials you funded yourself, plus a 30-day term on top. You are not a bank.

Choosing trigger points that do not cause arguments

The biggest mistake is triggering on time ("25% on 1 March"). Time triggers invite the reply "but you are behind". Trigger on physical events the customer can verify without trusting you, that cannot be half-done, and that leave a document behind.

• Electrical: materials delivered to site; first fix complete; consumer unit fitted and energised; testing and self-inspection signed off; handover.
• Plumbing and heating: strip-out complete; pipework pressure-tested; boiler or heat pump commissioned with certificate issued.
• Building and carpentry: groundworks complete; frame up; watertight (roof and windows in); second fix; snagging cleared.
• Painting and flooring: preparation signed off; first coat or subfloor complete; final coat complete.

Two hard rules. Never let the last stage be smaller than the money you would lose by walking away from snagging — 5% at handover is not enough incentive to come back, 15–20% is. And front-load only as far as the materials: asking 30% before you have bought anything reads as a deposit for your cash flow, while asking for the switchgear you must order and pay for reads as reasonable, because it is.

How many stages? Three to five. Under four weeks, invoice once. Four to eight weeks, three stages. Longer, four or five. Six or more is admin, and every extra invoice is another chance to be queried.

A worked example you can copy

Full rewire of a house. Contract sum 200 000 SEK excluding VAT: 120 000 labour, 80 000 materials. Swedish VAT on this work is 25%, so 250 000 SEK including VAT. The customer is a homeowner claiming ROT, which is 30% of the labour cost including VAT.

You are never more than about six weeks of work out of pocket, the customer never faces a 250 000 SEK bill out of nowhere, and the ROT sits on each stage in proportion to the labour actually in it.

Wording it in the quote

In Sweden, under the Consumer Services Act (konsumenttjänstlagen), a consumer is generally not obliged to pay until the work has been carried out unless you have agreed otherwise. "Agreed otherwise" means in writing, before you start. A payment plan invented in week five is not agreed. The standard Swedish consumer contract form, Hantverkarformuläret 17, has a section for payment terms precisely so this gets written down.

Put a block like this above the signature:

Payment plan. This job is invoiced in four stages as set out above. Each stage becomes payable when the stated trigger is reached, not on a fixed date. Payment terms 10 days from each stage invoice. Materials remain our property until the invoice covering them is paid. Additional work (ÄTA) is agreed in writing and invoiced separately. If a stage invoice is unpaid after the due date, work stops until it is settled, and the resulting delay is not a delay caused by us.

Every clause earns its keep. Trigger not date kills the "you are late" argument. Ten days rather than thirty stops you funding the job again. Separate invoicing for extras stops the plan turning into a running account nobody can reconcile. Stop-work is the only leverage that reliably works, and only if it was signed before the dispute.

Have the customer sign the quote electronically, so the plan sits in a timestamped document with an audit trail rather than an email they can say they never opened. OdinTask calculates the ROT deduction inside the quote, shows the customer the net figure, and takes the e-signature on the same document, so the plan they agreed to is the plan the invoices come from.

Reconciling á conto against the final invoice

If you run true á conto, the final invoice has to unwind everything. Get it wrong and you either double-charge the customer or leave money behind. Show, as separate lines:

1. The full contract sum, ex VAT.
2. Every approved ÄTA, itemised, with the date it was agreed.
3. Any deductions for work removed from scope.
4. Every á conto invoice already issued, each with its number, date and amount, deducted.
5. The balance, with VAT on the balance, and ROT recalculated against total labour minus what has already been claimed.

Number four is the line that gets missed. Reference the invoice numbers, not just a total — the customer's bookkeeper has to tick each one off against their own ledger. "Less payments received 150 000" generates a phone call every time.

VAT when you invoice before the job is finished

Here is the trap. Issuing the invoice is what creates the VAT liability, in the period that invoice falls in. A stage invoice in March means the VAT is declared for March, whether or not the customer has paid and whether or not the job is near done. If they sit on it for two months, you have already handed the VAT to Skatteverket out of your own account. So do not date a stage invoice on the last day of a VAT period when the first day of the next will do, and keep the terms short.

Two Swedish specifics to confirm rather than assume: there are special VAT timing rules for construction activity (byggverksamhet), and reverse charge VAT (omvänd byggmoms) applies to many construction services sold business-to-business within the sector, in which case your stage invoices carry no VAT and the buyer accounts for it. Whether it applies depends on what the buyer does, not what you do, and getting it backwards lands on you. Check at skatteverket.se.

ROT across several invoices

ROT is a Swedish tax deduction for renovation and repair labour in a private home: 30% of the labour cost, with an annual per-person ceiling shared with RUT. You deduct it on the invoice, the customer pays the net, and you claim the rest from Skatteverket. The ceiling amount changes, so check the current figure at skatteverket.se before promising anything.

• You claim per invoice, not once at the end. The request for payment (begäran om utbetalning) goes in after the customer pays that invoice, so four stage invoices means four claims — and the ROT money comes back in instalments.
• The ceiling can run out mid-job. If they spent most of the allowance on a bathroom in February, your stage three claim in October gets rejected and you are chasing a customer who thought it was covered. Ask before you quote, and again mid-job on anything long.
• Put the liability where it belongs. The quote needs a line saying that if Skatteverket refuses or reduces the deduction for a reason on the customer's side, the customer pays the difference.

Split the labour honestly across stages. Do not load it onto the first invoice to get the ROT back early.

If you are reading this outside Sweden

The mechanics travel; the law does not. In the UK, commercial construction contracts fall under the Housing Grants, Construction and Regeneration Act, which gives a right to interim payments on contracts over 45 days and runs on payment notices and pay less notices. It does not apply where the customer is a residential occupier having work done on their own home, so there your written contract is your whole protection. In New Zealand, the Construction Contracts Act 2002 runs on payment claims and payment schedules with a default 20-working-day response window; miss the schedule and the claim becomes payable in full. Australia has state-based Security of Payment legislation with the same shape. ROT has no equivalent in any of them, so skip that section and keep the trigger, wording and reconciliation logic.

Mistakes that cost real money

• Invoicing the stage a week late. The trigger fires Tuesday, the invoice goes out the following Monday because you were on site. That is a week of your money, every stage, every job.
• Letting extras leak into stages. Every ÄTA agreed verbally and added to "the next invoice" is a future dispute.
• No proof the trigger fired. Photos, a signed self-inspection, a timestamped completion on the job card. When stage two is queried, the answer should be a document, not your memory.

Make progress invoicing for trades automatic

Progress invoicing fails for a boring reason: nobody remembers to raise the invoice. The trigger fires on site and the paperwork happens on Sunday night, or next month, or never. Attach the payment plan to the job instead of keeping it in your head, so that when the field app records first fix as complete, the stage invoice is already there with the ROT calculated, ready to send. Try OdinTask free for 14 days and set a payment plan on your next long job, or see pricing.