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Forty percent of a 500,000 contract
The contract price is 500,000. Your estimate says the job is 40 percent complete. Previous bills total 150,000. Under the tax rule the percent is costs incurred divided by estimated total costs. A survey of work finished can go in the same box.
Contract price: 25% lower
Change contract price to 375,000 while keeping the other example values the same.
Contract price: 25% higher
Change contract price to 625,000 while keeping the other example values the same.
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Quick answer
What does the Progress billing cash calculate?
What can you bill at this percent complete? This calculator uses contract price, percent complete, and previous bills to estimate work completed, minus bills already sent immediately in your browser.
With the values currently entered, the result is $50,000.00 — to bill now. It also shows earned to date, previous bills, and still unearned.
How to use the Progress billing cash
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Contract price
- Percent complete — entered in %
- Previous bills
Progress billing cash formula
Earned to date = contract price × percent complete. This bill = earned to date − previous bills.
Assumptions
- 26 CFR 1.460-4 multiplies a completion factor by the total contract price, then subtracts the cumulative amount from the prior year. The regulation says that difference can be negative. This page uses the percent you type as the factor. Under the tax rule, the factor is costs incurred divided by estimated total contract costs.
- FAR 52.232-5 pays progress payments on estimates of work accomplished that meet the contract’s quality standards. ASU 2014-09, paragraph 606-10-55-17, also measures progress with surveys of performance completed to date. This page does not hold retainage. A hold on the bill belongs on the retainage cash delay calculator.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Multiplies the completion factor by the total contract price to get cumulative gross receipts, then subtracts the prior cumulative amount. The regulation says that difference can be a positive or a negative number. The tax factor is costs incurred divided by estimated total contract costs. This page lets you type the percent.
FAR 52.232-5, progress paymentseCFRScope: US federal fixed-price construction paymentsRequires progress payments on estimates of work accomplished that meet the standards of quality established under the contract, as approved by the contracting officer. Retainage is a separate paragraph in the same clause.
ASU 2014-09, output methodsFinancial Accounting Standards BoardScope: US GAAP revenue from contracts with customersParagraph 606-10-55-17 measures progress with output methods such as surveys of performance completed to date, milestones reached, and units delivered. This page multiplies the percent you type by the contract price.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Progress billing cash example and edge cases
A progress bill prices the work finished so far, then subtracts the bills you already sent. 26 CFR 1.460-4 multiplies a completion factor by the contract price and subtracts the prior cumulative amount. FAR 52.232-5 pays on estimates of work accomplished.
Example: Forty percent of a 500,000 contract
The contract price is 500,000. Your estimate says the job is 40 percent complete. Previous bills total 150,000. Under the tax rule the percent is costs incurred divided by estimated total costs. A survey of work finished can go in the same box.
- Contract price
- 500,000
- Percent complete
- 40 %
- Previous bills
- 150,000
Calculated result$50,000.00to bill now
Earned to date is 200,000. Previous bills are 150,000, so this bill is 50,000. The contract still has 300,000 unearned. Retainage, if the contract holds any, is a separate calculator.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 50,000 first. It is 200,000 earned minus 150,000 already billed. Forty percent of 500,000 is the 200,000. The regulation says the difference between this cumulative amount and the prior one can be negative.
- FAR 52.232-5 wants an estimate of work accomplished that meets the contract quality standards. Paragraph 606-10-55-17 also allows a survey of performance completed to date. This page does not hold retainage on the 50,000.
Edge cases worth checking
Previous bills already pass the earned amount
If previous bills are 220,000 and the job is still 40 percent complete, earned to date stays 200,000. This bill is negative 20,000. You are overbilled against this percent. The regulation allows that difference to be negative when the estimate changes.
Stored material is outside the percent
FAR 52.232-5 lets the contracting officer count material delivered on site, and preparatory work, when building the estimate. Leave that material out of the percent and the earned amount misses it. Put it in the percent when the approved estimate includes it.
What changes the result most
Contract price
Use a current amount for contract price. Include fees or recurring costs that belong in the same figure.
Percent complete
Test a lower and higher percent complete. A small percentage change can move the final result more than expected.
Previous bills
Use a current amount for previous bills. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Contract price: 25% lower
375,000$0.00already matches this percent
Contract price: 25% higher
625,000$100,000.00to bill now
Percent complete: 25% higher
50 %$100,000.00to bill now
Common mistakes
Check contract price
26 CFR 1.460-4 multiplies a completion factor by the total contract price, then subtracts the cumulative amount from the prior year. The regulation says that difference can be negative. This page uses the percent you type as the factor. Under the tax rule, the factor is costs incurred divided by estimated total contract costs. Make sure this matches the number you enter.
Keep previous bills consistent
FAR 52.232-5 pays progress payments on estimates of work accomplished that meet the contract’s quality standards. ASU 2014-09, paragraph 606-10-55-17, also measures progress with surveys of performance completed to date. This page does not hold retainage. A hold on the bill belongs on the retainage cash delay calculator. Use the same units and time period throughout the calculation.
Do not rely on one progress billing cash scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What can you bill at this percent complete?
It does not replace a quote, contract, accountant, or local employment guidance.