Field notes
Phased Billing for Light Commercial Electrical Buildouts
A light commercial electrical buildout runs 6 to 14 weeks. The cash flow of the project depends entirely on how you structured the billing schedule before the contract was signed. The contractor who bills at job completion floats 6 to 14 weeks of payroll, materials, and overhead on a project that does not pay until the GC pays them, which is 30 to 60 days after final completion.
Here is the phased billing schedule that keeps the project funded and the GC honest.
The four-milestone billing structure
Milestone billing maps payments to deliverables. The customer/GC pays at each milestone, not at the end. The structure looks like this for a typical 10-week light commercial electrical buildout:
Milestone 1: Contract execution and mobilization (15 percent)
Triggers on contract signing. Covers the engineering review, the materials order deposits, and the first-week mobilization. This payment is what funds the materials delivery to the supplier yard.
Milestone 2: Rough-in complete (40 percent)
Triggers when the rough-in inspection passes. Covers the rough-in labor and the majority of the materials cost. This is the largest milestone payment because it represents the largest cash outflow in the project.
Milestone 3: Trim and finish complete (30 percent)
Triggers when the final electrical work is complete and ready for final inspection. Covers the trim labor, the fixture installation, and the device installation.
Milestone 4: Final inspection and punch list (15 percent)
Triggers when the final inspection passes and the punch list is closed. Covers the close-out work and your retainage release.
Why this structure works
Each milestone is tied to a verifiable deliverable. The GC cannot dispute a payment when the rough-in inspection passed and the inspector signed off. The contractor is paid for work as it is completed, not as a lump sum at the end.
For the GC, the structure protects them too. They are not paying for work that has not been done. The 15 percent retainage protects them against punch-list issues.
The contract clauses that make phased billing enforceable
Schedule of Values. The contract attaches a one-page Schedule of Values that itemizes the milestones, the dollar amounts, and the triggering events. This is non-negotiable. Without it, the GC controls when payments happen.
Net 15 payment terms per milestone. Net 30 is industry standard but kills small electrical contractor cash flow. Negotiate Net 15 in the contract. Some GCs will push back. Hold firm or adjust the milestone dollar amounts to compensate.
Right to suspend work for non-payment. If a milestone payment is more than 15 days late, you have the contractual right to suspend work. This is not the goal. The goal is to never have to use it. But the clause being in the contract changes the conversation.
Change orders billed in real time, not at the end. Change orders during the project are billed at the next milestone, not held until final completion. This prevents change-order cash from being held hostage to a punch list dispute.
AIA G702/G703 documentation
Larger commercial jobs require AIA documentation — the G702 application for payment and the G703 continuation sheet. Smaller buildouts often do not require it, but using the format anyway shows the GC you operate professionally and reduces payment disputes.
How FieldCommand handles phased billing
FieldCommand tracks each milestone, the triggering inspection or deliverable, and the dollar amount. When the trigger event fires (rough-in inspection passes, for example), the milestone invoice generates automatically with the correct line items. Change orders during the project flow into the next milestone invoice. The G702/G703 format is available as an export.