On a short job, bill at the end. On a long one, that means carrying every cost until completion, and carrying all the risk too.
Milestone billing splits the work into stages and invoices each one. Simple in principle, and it goes wrong in a predictable way.
Tie milestones to deliverables, not dates
"30% on 15 October" invites an argument if the work has moved. "30% on approval of the design" does not, because it is tied to something that either happened or did not.
Date-based milestones create disputes precisely when you least want one.
Make the milestone verifiable
Each stage should end in something the customer can see: a document, a demonstration, a signed approval. If a stage ends in "work continued", it cannot be billed cleanly.
Front-load slightly
Costs in most projects are heaviest early. A schedule that pays evenly leaves you funding the expensive part. Weighting the first milestone higher is normal and defensible, and easier to agree at quotation stage than later.
Keep the final one meaningful
A final milestone of 5% gives the customer very little reason to close the project out, and those tail ends can drag for months. Ten to twenty percent keeps everybody interested in finishing.
Invoice on the day it is met
This is where most of the benefit is lost. The milestone is achieved and the invoice goes out a week later because nobody was watching. Every day of that delay is a day added to the payment date.
Put the milestones somewhere visible with the amount against each, so the invoice is raised the day it becomes due rather than the next time somebody remembers.
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