Signed off in March, invoiced in May
The design stage was signed off in the middle of a busy month. The project manager meant to tell the owner so the stage invoice could go out. It went out six weeks later, when the owner noticed during a cash flow review. The client paid on their own terms, a month after that.
The final balance is worse. The site launched, the client was delighted, and the final invoice was sent the next week. Then the client found a few snags and said they would pay once those were fixed. The snags were fixed. The client's finance team then needed a PO. Two months after launch, the final payment arrives, and in the meantime the studio has paid its developers for work finished long ago.
Why stage billing lags
- Milestones are hit in the project tool, but invoices are raised in the accounts package by someone else.
- The link between a sign-off and an invoice depends on someone remembering to pass it on.
- Final invoices go out after launch, when the client's urgency has gone.
- Snag lists after launch give clients a reason to hold payment.
- Payment terms and PO requirements are not captured at the start.
The agency does the work in stages and gets paid in a lump at the end, which is the opposite of what the proposal intended.
What slow stage payments cost
Cash flow suffers, especially for smaller studios with a few large projects running at once. The owner spends time chasing money instead of winning or running work. Once the site is live, the client has less reason to pay promptly. Some final balances are never fully paid because the conversation drags into a dispute about snags.
The stage billing we build
- At project setup, the payment schedule from the proposal is entered: deposit, stages with their amounts or percentages, and final balance, plus the client's payment terms and PO requirements.
- The deposit invoice is raised in Xero or QuickBooks as soon as the proposal is accepted, and work is scheduled once it is paid, if that is your policy.
- When a stage is signed off by the client, the matching stage invoice is drafted automatically and sent to the owner or finance to approve.
- The final balance is drafted when the build is signed off on staging, so it can be issued before launch or at launch, as your terms say.
- Snags raised after launch are logged separately against the project, so they are handled without being tied to the invoice.
- Unpaid stage invoices are followed up by reminders from your accounts package, and the project manager sees payment status next to the project.
| Moment | Invoice | Triggered by |
|---|---|---|
| Proposal accepted | Deposit | Acceptance recorded |
| Design signed off | Design stage | Sign-off on the approval page |
| Build signed off on staging | Final balance drafted | Staging sign-off |
| Launch | Final balance issued if not already | Launch recorded |
| Change requests approved | Added to next invoice | Change approval |
When final payment is due relative to launch is for your terms to say. The billing just follows them without relying on anyone's memory.
A project where cash follows the work
The client signs off designs on a Thursday. By Friday the owner has a draft invoice to approve, and it goes out that day. The build is signed off on staging and the final balance is issued before launch, as the terms now say. Post-launch snags are fixed through the support desk and never become a reason to hold payment.
Is your project cash lagging behind the work?
- Stage invoices go out weeks after the stage is signed off.
- Final payments drag on after launch.
- Clients hold payment until snags are fixed.
- Finance does not know when milestones are hit.
- Payment terms and PO needs are discovered at invoice time.