An interim invoice (also called progress invoice or partial invoice) is a bill sent for work completed so far on a long-term project, before the final invoice. It allows you to get paid incrementally as you complete project phases or milestones, rather than waiting until final delivery. Example: For a 6-month website project, you might send interim invoices at 25%, 50%, 75% completion, then a final invoice at 100%. Interim invoices improve cash flow, reduce financial risk, and make large projects more manageable for both you and the client.

Use interim invoicing for: Projects longer than 1 month duration, Total project value over $5,000, Projects requiring significant upfront investment (equipment, staff, materials), Clients with slower payment processes (30-60 day terms), Any project where waiting for full payment creates cash flow risk. Interim invoicing is standard practice for: Construction and contracting, Large consulting engagements, Enterprise software development, Multi-month design projects, Marketing campaigns with multiple phases. Even on smaller projects, 50% deposit + 50% on completion is a simple form of interim billing.

Common interim billing structures: Percentage-based: Bill specific percentages at milestones (25%, 50%, 75%, 100%). Milestone-based: Bill fixed amounts at deliverable completion regardless of time. Time-based: Bill monthly for hours worked or time elapsed. Combination: Mix of deposit, milestone payments, and final balance. Example for $20,000 project: 20% ($4,000) deposit upon signing, 30% ($6,000) at design completion, 30% ($6,000) at development completion, 20% ($4,000) final payment upon launch. Structure should align with your work phases and cash flow needs while being acceptable to client.

Essential interim invoice elements: 1) Label as "Interim Invoice" or "Progress Invoice #X of Y", 2) Project name and total contract value, 3) Current milestone or phase completed, 4) Percentage of project completed to date, 5) Amount billed in this invoice, 6) Cumulative amount billed to date, 7) Remaining balance to be invoiced, 8) Standard invoice elements (dates, payment terms, due date), 9) Description of work completed in this phase, 10) Reference to contract or original proposal. This transparency helps clients understand where project stands financially and builds trust.

Yes, but requires client agreement and documentation. Common reasons to modify: Project scope changed significantly, Timeline extended or compressed, Work phases shift, Client requests different payment structure. Process to modify: 1) Document reasons for change in writing, 2) Propose new billing schedule with justification, 3) Get written approval before invoicing differently, 4) Update contract with amendment if necessary, 5) Reference modification in next interim invoice. Example: "Per agreement dated [date], billing schedule modified from 4 equal payments to percentage-based milestones due to scope expansion." Never unilaterally change agreed billing schedule without client consent.

Scope changes require billing adjustment: 1) Pause current work to document scope change, 2) Calculate additional time/cost for new scope, 3) Propose revised total project cost and billing schedule, 4) Get written approval via change order, 5) Issue revised interim invoice reflecting new totals. Example: Original $20k project with 4 × $5k milestones. Scope adds $5k work. New structure: 5 × $5k milestones, or adjust remaining milestones upward. Always show: Original contract amount, Approved change orders, Revised total amount, Updated billing schedule. Include change order reference on interim invoices: "Includes Change Order #2 approved [date]: Additional feature set ($5,000)".

Address interim invoice disputes immediately: 1) Acknowledge concern promptly, 2) Review contract and agreed billing schedule, 3) Provide detailed work breakdown justifying amount, 4) Offer documentation (time logs, deliverables, screenshots), 5) Schedule call to discuss if needed, 6) Be willing to adjust if legitimate miscalculation. Common disputes: Client forgot agreed billing schedule, Work completed does not match their expectations, Percentage completion disputed, Previous invoice payments not credited. Resolution: Reference original contract terms, show work completed transparently, offer partial payment if reasonable, hold remaining work until payment resolved. Prevention: Send progress updates before interim invoices so no surprises.

Final invoice amount depends on your billing structure. Common approaches: Equal payments: All invoices same amount ($20k ÷ 4 = $5k each including final). Front-loaded: Larger early payments, smaller final ($6k + $6k + $5k + $3k). Back-loaded: Smaller early payments, larger final ($3k + $5k + $6k + $6k). Deposit plus finals: Large deposit, small interim, moderate final ($8k + $4k + $4k + $4k). Recommendation: Avoid having final invoice be largest payment. Front-load if possible—you have leverage early in project. If final invoice is largest, client has incentive to delay or dispute. Best structure: 50% front half of project, 50% back half, with final payment being smallest.