Remodeling Invoice Template: Progress Billing Guide
Remodeling invoice template for kitchen and bath projects with progress billing, allowances, change orders and a worked example to keep payments on schedule.
Quick answer: A remodeling invoice template is a progress billing document for kitchen, bath and home renovation projects. It shows the original contract amount, approved change orders, allowance adjustments, work completed by phase or milestone, payments received to date, any retainage and the amount due on this invoice.
Remodels run for weeks or months, involve dozens of decisions and almost always change along the way. A single invoice at the end does not work for you or the homeowner. This guide explains how to structure a remodeling invoice template around progress billing, how to show allowances and change orders without confusion, and how to lay out a complete kitchen remodel invoice with real numbers.
What is a remodeling invoice?
A remodeling invoice is a payment request from a remodeling or renovation contractor for work on an existing home or building. Unlike a one-visit service invoice, a remodeling invoice is usually one of a series. Each invoice reports progress against the contract, accounts for changes and allowances, and requests the next payment. The structure is similar to commercial progress billing, simplified for homeowners.
If you are newer to construction billing, the construction invoice guide and our contractor invoice template explain the basics this article builds on.
Remodeling invoice template: sections to include
| Section | Contents |
|---|---|
| Header | Business name, license number, contact details, logo |
| Invoice details | Invoice number, date, due date, draw or payment number (for example Draw 3 of 5) |
| Project | Homeowner name, project address, contract date and number |
| Contract summary | Original contract, change orders total, revised contract |
| Progress section | Phases or milestones, scheduled value, percent complete, amount earned |
| Allowances | Allowance amount, actual cost, difference |
| Change orders | CO number, date, description, amount |
| Payment summary | Total earned to date, less previous payments, less retainage (if used), amount due |
| Terms | Due date, payment methods, late fee, lien waiver note |
Our free invoice generator handles the line items and totals; you can put the contract summary in the notes field or as lines at the top.
How progress billing works for kitchen and bath remodels
There are two common progress billing methods for remodels.
Milestone billing
The contract sets payments at defined points. For a typical kitchen remodel:
| Milestone | Share of contract | What the homeowner can see |
|---|---|---|
| Deposit at signing | 10%* | Signed contract, schedule |
| Demolition complete, materials ordered | 20% | Empty room, cabinet order confirmation |
| Rough plumbing and electrical passed inspection | 25% | Inspection sign-off |
| Drywall and cabinets installed | 25% | Cabinets on walls |
| Countertops, backsplash, fixtures (substantial completion) | 15% | Working kitchen |
| Punch list complete | 5% | Final walkthrough sign-off |
*Deposit limits vary. California, for example, generally caps home improvement down payments at the lesser of $1,000 or 10% of the contract price (see the Contractors State License Board). Set your deposit to comply with your state's rules.
Percentage of completion (schedule of values)
For larger renovations, break the contract into a schedule of values by trade or phase and bill each period on the percent complete for each line. This mirrors the AIA G702 and G703 approach used on commercial work; see our guide to AIA G702/G703 billing if a lender or architect requires that format.
Allowances: how to show them on a remodeling invoice
Allowances let you sign a contract before every finish is chosen. The contract might include a $4,000 allowance for tile, $2,500 for light fixtures and $1,200 for cabinet hardware. When the homeowner selects products, you reconcile:
| Allowance item | Allowance | Actual | Difference |
|---|---|---|---|
| Tile (materials) | $4,000.00 | $4,860.00 | +$860.00 |
| Light fixtures | $2,500.00 | $2,140.00 | -$360.00 |
| Cabinet hardware | $1,200.00 | $1,200.00 | $0.00 |
| Net allowance adjustment | +$500.00 |
State in your contract whether allowances cover materials only or materials plus installation, and whether overages carry your markup. Unclear allowance language is one of the most common sources of remodel disputes. Our guide to materials markup explains how to present markup on allowance overages.
Change orders on remodeling invoices
Homeowners change their minds: a wider island, an added pot filler, a moved window. Each change needs a signed change order before the work, and each invoice should list every approved change. Read our guide to change orders and scope creep for a change order template and approval process.
Remodeling invoice example: kitchen remodel, draw 4
This example shows the fourth invoice on a kitchen remodel using milestone billing. Figures are illustrative.
Northside Remodeling Co. | Invoice NR-2026-204 | Draw 4 of 6 | Date: October 29, 2026 | Due: November 5, 2026
Client: J. and S. Morales | Project: Kitchen remodel, 55 Birch St. | Contract dated August 12, 2026
| Contract summary | Amount |
|---|---|
| Original contract amount | $68,000.00 |
| CO-1 (Aug 30): relocate sink to island, add plumbing and electrical | $3,200.00 |
| CO-2 (Sept 18): add under-cabinet lighting | $850.00 |
| Net allowance adjustment (tile +$860, fixtures -$360) | $500.00 |
| Revised contract amount | $72,550.00 |
| Milestone | Share | Scheduled value | Status | Earned |
|---|---|---|---|---|
| 1. Deposit at signing | 10% | $6,800.00 | Paid | $6,800.00 |
| 2. Demo complete, materials ordered | 20% | $13,600.00 | Paid | $13,600.00 |
| 3. Rough-in passed inspection | 25% | $17,000.00 | Paid | $17,000.00 |
| 4. Drywall and cabinets installed | 25% | $17,000.00 | Complete | $17,000.00 |
| Change orders CO-1 and CO-2 (completed) | $4,050.00 | Complete | $4,050.00 | |
| Allowance adjustment (selections finalized) | $500.00 | Final | $500.00 | |
| Total earned to date | $58,950.00 | |||
| Less previous payments (draws 1 to 3) | -$37,400.00 | |||
| Amount due this invoice | $21,550.00 | |||
Milestones 1 to 4 add up to $54,400 of the original contract (80%). Completed change orders add $4,050 and the allowance adjustment adds $500, so $58,950 has been earned. After subtracting $37,400 already paid, $21,550 is due. The remaining $13,600 (milestones 5 and 6) will be billed later. Because change orders were billed when complete rather than spread across milestones, the homeowner can tie every number back to a signed document.
How to create a remodeling invoice step by step
- Confirm the milestone is complete and take dated photos.
- Open your remodeling template in the invoice generator and assign the next invoice number.
- Update the contract summary with any new change orders and allowance adjustments.
- Mark milestones complete and calculate the amount earned to date.
- Subtract previous payments (and retainage, if your contract uses it; see our retainage invoice guide).
- Add terms: due date, payment methods and any late fee.
- Attach a conditional lien waiver if the homeowner or lender requires it.
- Send the invoice and schedule a reminder for the due date.
Common remodeling invoicing mistakes
- Billing ahead of the work. Front-loaded payment schedules erode trust and may break state rules.
- Verbal change orders. Homeowners remember conversations differently. Get signatures.
- Allowance surprises. Reconcile allowances as selections are made, not at the end.
- No running totals. Every invoice should show the revised contract, earned to date and paid to date.
- Forgetting subcontractor waivers. If a sub is unpaid, the homeowner's property may be at risk. Collect waivers from subs and suppliers.
- Unclear final payment trigger. Define substantial completion and the punch list holdback in the contract.
What to put in the notes and terms of a remodeling invoice
Remodeling invoices go to homeowners, and homeowners are not accounts payable departments. Plain-language notes reduce questions and speed up payment. Useful notes include:
- What this draw covers. "This invoice covers milestone 4: drywall finished and all cabinets installed, completed October 27."
- What comes next. "Next milestone: countertops, backsplash and fixtures, estimated completion November 14."
- Open decisions. "Please confirm pendant light selection by November 3 to keep the schedule."
- Payment instructions. Accepted methods, who to make checks payable to, and whether card payments carry a fee.
- Lender instructions. If a home equity lender or construction loan pays draws, note the inspection or paperwork the lender needs before releasing funds.
Keep the tone factual. A homeowner living without a kitchen is already stressed, and a clear "here is what is done, here is what is next" note keeps the relationship good through the hardest weeks of the project.
What if a homeowner does not pay a remodeling invoice?
Most late remodel payments come from confusion or a disagreement over quality, not a refusal to pay. Work through these steps in order:
- Call first. Ask whether there is a question about the invoice or the work. Many issues are resolved with a walkthrough.
- Fix legitimate punch list items quickly. A small fix removes the reason to hold payment.
- Send a written reminder. Reference the contract section that sets the payment schedule and state the amount and due date.
- Pause work if the contract allows. Many remodel contracts let you stop work when a progress payment is past due. Give written notice before you stop.
- Protect lien rights. Lien deadlines are strict. Check your state's timeline for mechanics liens and any required preliminary notices.
- Escalate formally. A demand letter, mediation or small claims court may be next. Our guide to a client not paying an invoice covers escalation options.
Progress billing itself is your best protection: if payments track the work, the most you can be owed at any moment is about one draw, not the whole project.
Taxes, licensing and records
Most states require a contractor license or home improvement registration for remodeling above a set dollar amount, and many require specific contract terms such as cancellation rights. Sales tax treatment varies: many states treat remodeling as a capital improvement where you pay tax on materials, while others tax some repair work. See our guide to sales tax on invoices. If you pay subcontractors, collect a W-9 at the start; our W-9 and 1099 guide covers year-end reporting. This is general information, not legal or tax advice.
A remodeling invoice template built around progress billing, allowances and change orders keeps homeowners informed and payments on schedule. Set up your layout once and reuse it for every draw. Our free invoice generator requires no sign-up and creates a downloadable PDF in your browser, so you can send each draw invoice the day a milestone is done.
Frequently asked questions
What is an allowance on a remodeling invoice?
An allowance is a budget amount in the contract for items the homeowner has not picked yet, such as tile, light fixtures or cabinet hardware. When the customer makes the selection, the actual cost is compared with the allowance. If it costs more, the difference is added; if less, the difference is credited. Show the allowance, actual cost and difference on the invoice.
How should a remodeler structure a payment schedule?
Many remodelers tie payments to milestones: a deposit at signing, then payments after demolition, rough-in inspections, cabinets or drywall, and a final payment at substantial completion. Each payment should match visible progress so the homeowner is never far ahead of or behind the work. Check your state's home improvement rules, as some limit the deposit and require a written schedule.
How do I show change orders on a remodeling invoice?
List the original contract amount, then each signed change order by number, date, short description and amount, then the revised contract total. Below that, show what has been billed and paid to date and the amount due now. This layout lets the homeowner reconcile your invoice against their own records in a minute.
Should I bill a remodel by percentage complete?
Percentage-of-completion billing works well for larger remodels, especially if you use a schedule of values that splits the contract into phases such as demolition, framing, plumbing, electrical and finishes. Each invoice reports the percent complete per phase. For smaller jobs, simple milestone payments are easier for homeowners to understand.
What happens if the homeowner wants to pause the remodel?
Your contract should cover pauses and cancellations. Commonly the contractor bills for work completed and materials ordered to date, plus any restocking fees for returned items. Send an invoice that clearly shows completed scope by phase, non-returnable materials and credits for returns, and keep photos documenting the state of the project when work stopped.
Do remodeling contractors charge sales tax?
In many states, remodeling is treated as a capital improvement to real property, so the contractor pays sales tax on materials and does not add tax to the invoice. Some states tax repairs or certain services, and rules differ for materials billed separately. Check your state's revenue department or ask a tax professional before setting up your invoices.
How much deposit can a remodeling contractor take?
It depends on the state. Some states cap down payments on home improvement contracts, for example California generally limits them to the lesser of $1,000 or 10% of the contract price. Many other states have no specific cap but require a written contract. Check your state contractor licensing board, and size deposits to cover early material orders.
Do I need a lien waiver for a remodeling payment?
Homeowners, lenders and title companies often ask for lien waivers in exchange for payments, especially on large remodels financed by a home equity loan. A conditional waiver is given with an invoice and becomes effective once payment clears. An unconditional waiver confirms payment has been received. Your subcontractors and suppliers may need to provide waivers too.
What is substantial completion in a remodel?
Substantial completion is the point where the space can be used for its intended purpose, such as a kitchen where appliances work and cabinets and counters are installed, even if minor punch list items remain. Many contracts tie the final payment, less a small holdback for the punch list, to substantial completion. Define it in your contract to avoid arguments.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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