Milestone Billing
Milestone billing ties invoice payments to completed project deliverables.
With milestone billing, the contract defines specific deliverables or stages, and an invoice is issued each time one is completed and accepted. Payment depends on results rather than time spent. Clear, verifiable milestone definitions are essential — vague milestones are the main cause of payment disputes under this model.
Example
A web project bills 30% on design approval, 40% on development completion, and 30% on launch.
Related terms
Frequently asked questions
What makes a milestone definition enforceable?
Specificity and verifiability: name the deliverable, the acceptance criteria, and who signs off. 'Beta version delivered and client-tested' works; 'good progress made' does not.
Can milestones be combined with hourly billing?
Yes — hybrid contracts are common: milestones trigger fixed payments while out-of-scope work bills hourly. Keep the two clearly separated on the invoice.
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