Progress Payment

Progress Payment is a common payment method in international trade and engineering projects. It refers to payments made by the buyer to the seller or contractor in installments according to an agreed percentage, based on the actual completed stage of work or delivery progress during contract execution. It differs from Advance Payment, which is paid before delivery of goods, and from Final Payment, which is settled after full completion. Instead, it falls between the two, serving to ease the financial pressure on the seller/contractor while reducing the buyer's risk of lump-sum payment. It is commonly used in large equipment procurement, engineering projects, and long-term supply contracts. Precautions: The contract must clearly specify progress milestones, payment ratios, acceptance criteria, and required documents (such as progress reports, inspection certificates, invoices, etc.), and attention should be paid to its combination with payment methods such as L/C or D/P. The difference from Installment Payment is that progress payment emphasizes payment based on actual completed progress, while installment payment may be paid at fixed times or in fixed amounts, not directly linked to progress.