In one line
The contract price broken into named stages or lines, each with its own dollar value.
Also called an SOV, a payment schedule, or a breakdown of the contract sum.
What it means in practice
The schedule of values is agreed on the quote before the work starts, and every progress invoice refers back to it. It is what turns "about 40% done" into a number both sides can check.
Two rules: each stage should be worth at least what it costs you to reach it, and the last stage should be small enough that a client holding it over a punch list is holding a nuisance rather than your margin.
Covered in full in the guide to progress billing.
Example. $1,840 deposit, $5,520 rough-in, $7,360 tile and fixtures, $3,680 completion, totalling $18,400.
Where it shows up on the paperwork
A table on the quote: named stages or lines with a dollar value each, adding up to the contract sum. Every progress invoice refers back to it.
What goes wrong
- Front-loading it so heavily that the client loses the incentive to finish the job with you.
- Back-loading it so your margin lives in the final payment.
- Writing stages nobody can verify, which turns every invoice into a negotiation.
The tools for this
Related terms
- Progress billingInvoicing one job in stages as they are completed, rather than in a single invoice at the end.
- Milestone billingInvoicing when a named stage of a job is finished rather than at the end.
- Change orderA written record of a change to the scope, price or schedule after the quote was accepted.
Common questions
Who prepares the schedule of values?
You do, as part of the quote, and the client approves it by accepting. On larger jobs the general contractor or the lender may want it in their own format.
How detailed should it be?
Detailed enough that each line is worth invoicing and can be shown as complete. On a remodel that is usually four to six stages; on commercial work it follows the trades.