Even though we sometimes pay a deposit at the start of the work, no one would want to pay for the entire job before seeing the first construction machine on-site. From the other side, a general contractor would quickly go bankrupt if they only billed for the work at the end of the project. Hence the necessity for progress reports and progress payment invoices!

Note for french version: The terms "progress report" and "progress payment invoice" are the terms used in France. In French-speaking Belgium, the terms "progress report" and "progress payment invoice" are used instead. For the rest of the article, we will mostly use the terms used in France.

Definition of a progress report?

A progress report is a detailed overview of the progress made on the construction site. The progress report is an essential document in managing a construction project.

What is a progress payment invoice?

The progress payment invoice bills for the percentage of work actually completed. It is the progress payment invoice that results from the progress report.

The progress payment invoice for effective financial management of the construction site

It can be common to bill projects in "broad" phases, based on a timeline rather than actual work completed. This practice can be disadvantageous for both the client and the company.

A system of periodic billing based on progress reports presents numerous advantages:

• Precise financial tracking: The progress report allows for close monitoring of actual costs against the projected budget, facilitating financial management for both the project owner and the construction company.
• Financial coherence: A clear and factual view of work progress enables effective resource management.
• Communication: The progress report provides complete transparency to stakeholders regarding the work's progress and associated costs.

How to present a progress report?

The presentation of a progress report on a construction site is usually done monthly. It involves the use of three key documents, each serving a specific role in tracking the work and billing:

1. The progress report
2. The debt declaration (DC)
3. The progress payment invoice

It is common to use Excel for these three documents. While Excel works well, you should be careful to:

• Automate to avoid double entries.
• Secure and protect to prevent errors.
• Standardize to save time between each table and ensure consistency in your financial and technical documentation.

There are also specialized software tools that allow you to manage all three documents and sometimes even more.

What information should be included in a progress report?

Typically, a progress report includes the following:

• The start and end date of the progress report.
• The progress report number.
• A list of tasks ordered and numbered as in the Specifications.
• The units of measurement (U) used to define each quantity (m², m³, hours, etc.).
• Quantities initially planned (Q) in the contract.
• Unit prices (UP) for each task as defined in the contract.
• Quantities actually completed (Qr) up to the progress report's closing date.
• The percentage (%) this represents (for informational purposes).
• The total amount (€ cumulative), i.e., UP x Q (billable).
• The amount already billed (€ previous) in earlier progress reports.
• The amount to be billed (€ billable), which is the difference between € cumulative and € previous.
• The sum of all amounts to be billed (TOTAL): cumulative, previously billed, and billable in this progress report.

Example

Progress report no. 22 from 01/06/2024 to 30/06/2024

The debt declaration (DC)

The debt declaration is a financial document derived from the progress report. Unlike an invoice, it is non-contractual and serves as a proposal. It is used to request payment for part of the work completed at a given point in the project.

The debt declaration is based on the information provided by the progress report and must comply with the contract terms.

Key elements of a debt declaration:

• Contractual information;
• Billing period;
• Progress report number;
• Progress payment invoice attached;
• Approval conditions (delays before automatic invoicing).

The progress payment invoice

Once the debt declaration is approved, you can issue the progress payment invoice. It resembles the debt declaration but with the following key additional elements:

• Invoice date;
• Progress report date;
• Amount to be billed excluding tax;
• Taxes;
• Total amount due;
• Payment conditions;
• Payment details.

Word and Excel offer templates for progress payment invoices.If you use specialized software, such templates will be available and sometimes customizable. This is the case with Cooperlink.

What is lean planning?

Lean planning is a project management approach inspired by the principles of Lean Management, initially developed in the automotive industry by Toyota. Implementing lean on a construction site can be done through a variety of tools (Lean Planner System, 5S Methodology, Kanban, Value Stream Mapping, etc.), each adapted to the site's needs and specifics.

The objective of lean planning is to optimize processes and maximize added value for the clients. Applied to construction projects, lean planning enables more efficient and collaborative work coordination and execution.

• Optimization of flows (movement of resources - People, materials, machines)
• Regular schedule monitoring
• Elimination of waste (resources, money and time)
• Continuous improvement
• Collaboration and communication
• Flexibility and adaptability
• Team involvement and empowerment

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Lean planning, with its principles of optimization and waste elimination based on regular schedule monitoring, can transform the way progress reports are established and managed on a construction site.
A 'lean' progress report means a more efficient, accurate, and useful process for establishing progress reports for all stakeholders.

• Simplification of processes
• Regular feedback
• Real-time progress reporting
• Agile management of modifications
• Team involvement

The 7 mistakes to avoid when preparing a progress report

Mistake #1 – A progress report not based on contractual documents

• You are billing masonry in m³, but it is measured in m² in the contractual estimate;
• You are counting paint by layer, whereas the Specifications provide for billing by m² for three layers, so your total quantities are different;
• You change the type of tiles and increase the unit price without any traceability;
• To top it all off, you don’t use the same order of items between the contractual estimate and the progress report.

Have you ever played the game of spot-the-difference between the quantities stated in the contract, those billed by your subcontractor, and those you are billing to your client? It’s frustrating, isn’t it?

• You’re lost. It’s impossible to know what to bill and when.
• Your client nitpicks over every line. Of course, it’s not clear.
• You risk forgetting important items and losing money in the process...

Mistake #2 – A progress report misaligned with reality

‍In the family of misaligned progress reports, we have:

• The progress report by monthly percentage: A 10-month project, so I bill 10% each month, right? Surprise, project expenses are anything but linear! You’ll run out of cash as soon as the site is set up.
• The progress report based on theoretical planning: We bill masonry in March because it was scheduled for March. Even if the mason hasn’t yet set foot on site…
• The progress report based on the foreman’s random guess from inside his site office (it’s cold outside): A quick dice roll, and voila... 28.45% of the reinforcements have been installed (adding decimals always looks good). Except you’ve already paid 75% of these reinforcements to your subcontractor.

Whatever the case, you’ll end up with:

• An unhappy project owner,
• Cash flow problems, and
• Major discrepancies in your accounting.

Mistake #3 – Procrastinating the preparation of the progress report

The classic scenario in financial management on a construction site is when the project owner receives three progress payment invoices all at once after three months of work. Then nothing… Then two more in a row… The project owner chases after the invoices, the contractor faces cash flow issues, and the architect has to check the quantities in a hurry. Get ready to welcome a host of unhappy stakeholders!

Mistake #4 – A static progress report document

On the first day of the site, you established a nice progress report template in Excel. You followed advice number 1, it is well based on contractual documents. Bravo! And each month, tirelessly, you retrieve the same document to complete it. Beware, the progress report is a dynamic document: every construction site has its share of amendments, adjustments, and presumed quantities...
A site manager who ignores the dynamic aspect of the progress report will forget to bill a significant amount!

Mistake #5 – Not taking into account the previous progress report

If the contractor bills for the quantities realized in a given month without considering the previous progress reports, they might face rounding issues at best or addition problems at worst.
The progress report is not just the quantity realized in a month. The progress report reflects the total quantity installed on-site, from which you subtract the amount already billed in previous progress reports.
This is why the monthly progress report always includes three totals per task: the total realized, the total previously billed, and the total billed this month.

Mistake #6 – Delegating without controlling the progress report document

Even though the progress report may seem like an administrative chore, it remains a crucial document over which you must keep control.
Don’t fall into these traps:

• Letting the architect or project owner decide unilaterally.
• Accepting the quantities billed by the subcontractor without any verification.
• Delegating 100% of the preparation of the progress report to administrative staff who never set foot on-site.
  Keep control over the quantities being billed, it's the foundation of sound project management.

Mistake #7 – A linear approach to the progress report

In a linear vision of project management, the focus is on sticking to the initial plan rather than creating value for the client.
A progress payment invoice remains an agile and adaptable document. Avoid these non-agile tendencies:

• Excessive anticipation (you prepare everything at the start of the site only to redo it after three months).
• A document structure that is too rigid (it's impossible to account for a discount following an on-site error because it’s not foreseen in the locked file!).
• Processes that are too rigid: A precise procedure where five weeks of approval are lost as soon as a single stakeholder is absent.
  An overly rigid and structured process forces teams to develop workaround strategies that are often improvised and risky.

Why is good progress report management a valuable asset to your project?

‍Managing progress reports is a key component of a successful construction project. The progress report is the perfect intersection of your technical and financial documents. Without a minimum of structure and coherence, this union risks becoming unbalanced!

Effective management offers many advantages that translate into time savings, cost savings, and increased satisfaction for all stakeholders.

An agile vision for your planning

‍Implementing agile management of progress reports allows for quick adjustments to the schedule based on on-site realities. Think of the progress report as more than just a financial document; it’s a “snapshot” of your construction site. You can immediately visualize the progress made and identify any potential delays or issues.
Viewing your planning and billing documents as a whole offers undeniable advantages:

• Increased responsiveness: Adjustments can be made in real-time, allowing for quick responses to unexpected events.
• Better coordination: A clear and shared vision of the schedule promotes coordination between teams and improves overall efficiency.

Reducing administrative time spent managing progress reports

‍Managing progress reports can be time-consuming if not well organized. Imposed formats, copy-pasting, and multiple entries (planning, progress reports, sales, purchases) can complicate the process.
Each stakeholder verifies according to their own processes. Each one makes their calculations separately: the architect, the company, the subcontractors, and the project owner… That’s four calculations for the same quantity!

When a progress report is presented in a somewhat disorganized way, everyone wastes precious time on corrections, data entry, verifications, approvals, etc.
A well-prepared progress report means:

• Optimizing your processes: Using appropriate and standardized tools reduces the time spent entering and verifying data.
• Reducing errors: A well-established system minimizes the risk of human errors, ensuring more reliable and consistent information.
• Increasing your efficiency: Less time spent on administration means more time to focus on value-added tasks. For example, leaving the site office to check the quality of the reinforcement installation...

Agile cash flow

Good management of progress reports allows for more precise and faster billing, both for clients and subcontractors. By working with actual quantities rather than estimated ones, financial flows are improved.

• Precise billing: The amounts billed are justified by accurate data, reducing disputes and speeding up payments.
• Improved financial management: Better visibility on progress and costs allows for better cash flow management and anticipation of funding needs.
• Balanced costs and expenses: The contractor spends what they bill. The subcontractor bills what they spend. The project owner spends what they see built. Stakeholder satisfaction is achieved—perfect timing, as this is the subject of the next chapter!

Stakeholder satisfaction

Nothing is worse than a construction site where everyone arrives reluctantly. Every site meeting turns into a brawl, a symphony of disagreements. People fight over registered letters and systematic refusals of every cost breakdown or progress report.

Stakeholder satisfaction may seem expensive, but dissatisfied stakeholders will cost you much more: financially, but also in terms of team morale, your company's credibility, network, and marketing influence...

A well-managed progress report offers transparent and quickly verifiable quantities, which limits conflicts and endless discussions on the construction site.

• Transparency: The clarity of shared information strengthens trust among all stakeholders (clients, subcontractors, managers). No time wasted discussing and verifying.
• Reduced conflicts: Precise and shared data reduce disagreements about progress and payments.
• Increased satisfaction: Clients and subcontractors feel better informed and involved, which increases their overall satisfaction. And they will continue wanting to work with you! A good long-term investment.

Solution: For smooth, dynamic, and lean progress reports

Teamoty

A software provider dedicated to the construction sector, Teamoty offers its Teamoty Scheduling solution, a planning and work tracking tool inspired by the principles of Lean Construction methodology.
Teamoty Scheduling offers various display features (geo-temporal planning, weekly planning, three-week planning, planning by trade, color-coded plans) that facilitate the daily work of teams in planning tracking and coordination.
As both a planning, site tracking, and operational management tool, Teamoty Scheduling allows tasks to be organized efficiently and key project performance indicators to be tracked.

Cooperlink

Cooperlink is a company active in data management for the real estate and construction sectors. The Cooperlink team understands the concerns of their users and offers efficient solutions to support and facilitate their work.

Cooperlink has developed a data-driven solution for managing contractual and financial documents. This data-oriented approach allows for the efficient drafting of your contractual documents, such as:

• Client contracts
• Subcontractor contracts
• Progress reports, debt declarations, and client progress payment invoices
• Subcontractor billing

Always with the idea: input the data once, and the rest (contracts, progress reports, planning, invoices, etc.) is just configuration!

Teamoty-Cooperlink Module

Teamoty and Cooperlink collaborate closely, particularly in the creation of a synchronization module between Teamoty's lean planning and Cooperlink's contractual progress reports.

• Cooperlink links planning tasks to contract activities (equivalent to work items);
• Cooperlink synchronizes Teamoty's planning in real-time;
• The progress report is automated based on the actual planning executed;
• A debt declaration is generated based on the progress report;
• Thanks to an export feature, you can integrate billing into your ERP system;
• The solution remains flexible and agile: it allows you to maintain control over your figures, whether for under-billing, over-billing, or other site modifications.

The data from planning and progress reports is used dynamically and efficiently! No more need to enter similar information multiple times in different software.

• Reduced time spent on pure administration
• Simplicity of processes
• Dynamic coherence between technical and financial documents
• Ease of use for all stakeholders, regardless of the internal software they us.

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Explore our product solutions or contact a sales representative for more information!