Basic Concepts
This section discusses progress payments and delivery invoices, in general. The concept of liquidation and some accounting issues are also discussed.
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Progress Payments and Delivery Invoices
Progress payment bills are sometimes used for fixed-price projects that require a long lead time before deliveries under the contract can be made, or where substantial amounts of money must be expended before the contractor becomes eligible for partial payments on deliveries.
When the customer pays progress payment bills, these payments represent a liability by your company because no delivery was made.
Unliquidated progress payments are frequently shown on the balance sheet as a liability rather than as a negative receivable.