When working on a long-term construction project, contractors often use progress billing to keep cash flowing during the project. Progress billing involves requesting funds for the portion of the work that has been complete. It is usually based on a percentage of the contract. Most project owners require a breakdown of the work on the project, showing the progress on each line item of the breakdown. This is called a schedule of values and is used by most contractors when they are billing long-term projects. We’re going to look at what a schedule of values is, how it’s used, and how to create one.

Construction companies bill projects based on the progress of the job via a schedule of values. A schedule of values lists every billable item on the project along with the subsequent dollar value of that task. Typically, progress billings are submitted monthly, but complicated projects may require more frequency. A project manager enters a % completion or amount for each item as they progress on the project. This routes to the architect and owner for approval. Once approved, the accounting team generates an AR invoice from the progress billing to ensure accounting and job costing are always in sync. The SOV is a valuable tool in the evaluation of percent complete on a project as well as a management tool for the billing process each month.

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