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The Progress and Final Invoice.
What is a progress invoice? How do you proceed? What needs to be considered? This article provides a compact overview of progress and final invoices related to a project.
English image not yet available... What is a progress invoice?
A progress invoice is billed before the final completion of the project for a percentage or relative share of the total amount.
Common practice:
30–50% of the proposal amount is invoiced after the project start or a first milestone. At the project completion, the corresponding final invoice follows.
Common practice:
30–50% of the proposal amount is invoiced after the project start or a first milestone. At the project completion, the corresponding final invoice follows.
When does a progress invoice make sense?
Typically, orders are invoiced after completion – that is, after the service has been provided. However, larger projects tie up many resources over an extended period. This raises the question of how to ensure cash flow during this "dry spell" to pay all employees their salaries on time. For this reason, arranging one or more progress payments makes sense for larger projects. It can also be an advantage for the customer if they do not have to settle a large sum all at once at the end of the project.
How do you proceed?
This should be considered already during the proposal phase. If the proposal amount is relatively high, a progress payment can be agreed upon with the customer. Often, the proposal will state, for example, "50% of the proposal amount is due at the start of the project". After the customer confirms the proposal, a corresponding progress invoice is created.
What needs to be considered for a progress invoice?
- A progress invoice is essentially a normal invoice and must contain all the usual information.
- Additionally, it should be labeled as "progress invoice" (or with a related clear term - e.g., "Akontorechnung") for good traceability, ideally numbered if there are several progress invoices.
- Every progress invoicing process must include a final invoice.
The Final Invoice
- A final invoice should bear the title "Final Invoice" (or End Invoice). It is clear that this invoice is associated with one or more progress invoices.
- The deduction of progress invoices is made by specifying the invoice number, invoice date, and VAT amount.
- Progress invoices are either a) deducted net before the final invoice sum and by specifying the invoice number, invoice date, and VAT amount or b) gross afterwards.
How it works in MOCO
Invoice projects more comfortably: Progress and Final Invoice.
Special case of temporary VAT reduction in Germany
If a progress invoice was issued with a different tax rate than the final invoice, this difference must be corrected. MOCO calculates the tax correction and indicates it on the final invoice.
Further Links
Confirming a proposal – Placing an order. That's the difference.
Special case of temporary VAT reduction in Germany
If a progress invoice was issued with a different tax rate than the final invoice, this difference must be corrected. MOCO calculates the tax correction and indicates it on the final invoice.
Further Links
Confirming a proposal – Placing an order. That's the difference.
