Progress billing and construction holdbacks

Construction progress billing means invoicing a project as the work advances instead of waiting until the end. In OKTO PSA for construction, you bill completed phases or the percentage complete on each line of the schedule of values. The holdback, GST, QST and your RBQ licence number land on the invoice without retyping anything.

Two ways to bill a project

Few construction contracts say “pay me when it’s done.” Most call for milestone payments or a monthly payment application based on progress. OKTO PSA handles both. Billing by phase is always available; progress billing by line item is an option you turn on when your contracts call for it.

By phase

Project phases come straight from the signed quote. Each group of quote lines becomes a phase with its own budget, and a phase’s price is the sum of its purchase order lines. When a phase is done, you check it off. You can check several and put them on one invoice, with a preview before it goes out. The phases and sub-projects page covers how the breakdown works.

By percentage complete

For each line of the schedule of values, you enter a percentage complete, with a date and a short justification. OKTO PSA bills the difference between that percentage and what was already billed on the line. Nobody has to redo the math for every payment application.

A made-up example: a $40,000 line was billed at 25% last month. This month the foreman reports it at 60%. The invoice carries 35% of the line, or $14,000 before tax. Next month starts from 60%.

The justification matters. Under article 2108 of the Civil Code of Québec, when the price is based on the value of work performed, the contractor has to account for progress and expenses incurred if the client asks. A dated, explained percentage for every line is exactly what you’ll be asked for.

Extras follow the same path. Once an extra is priced and approved by the client, it’s added to the next invoice, and invoices can be grouped by change order. See the change orders page for the details.

Holdbacks tracked until release

On private work in Quebec, the 10% holdback is a contract practice. No law requires it: the contract sets the percentage and when the money is released. The Civil Code still gives the client two rights. On acceptance of the work, the client can keep enough to cover apparent defects or poor workmanship they noted (art. 2111), unless the contractor provides sufficient security. The client can also hold back enough to pay workers and anyone who gave them written notice of their contract, until a release is provided (art. 2123).

In OKTO PSA, every holdback is tracked on the project:

• the percentage held on each invoice;
• the release date and conditions;
• the balance still to be released;
• a “To be set” status when the release date hasn’t been agreed yet.

When the conditions are met, you know how much to claim without digging through old invoices. A holdback forgotten on a finished job is money that can sit for months.

Public contracts have their own rules. Quebec’s prompt payment regime under the Act respecting contracting by public bodies has applied since September 8, 2025 to building contracts of $750,000 or more. It extends to contracts from $75,000 to $750,000 on September 8, 2026, then to all contracts on September 8, 2027. The holdback is capped at 10% if the contract provides for one, and it can be claimed on acceptance of the work. The holdbacks guide lists the civil engineering thresholds and payment deadlines.

GST, QST and RBQ licence on the invoice

GST and QST print on separate lines, with your registration numbers under each tax. GST is 5%. QST is 9.975%, calculated on the price before GST, for a combined 14.975%. Revenu Québec’s own example: on $13,000, GST comes to $650 and QST to $1,296.75. If you also work in Ontario or another province, taxes follow the province.

Quebec’s Building Act (s. 57.1) requires licence holders to show their licence number on estimates, bids, contracts and statements of account. The Régie du bâtiment du Québec specifies that invoices are included. Since 2024, leaving it off can bring an administrative penalty of $500 for an individual and $1,500 for a company. OKTO PSA puts your RBQ licence and NEQ on invoices and in the header of every document, set once.

What your client sees in the portal

Your client gets a portal showing their purchase orders, the amount left to bill, work orders, projects and holdbacks. They can see what’s left on the contract and what’s being held, with the release conditions. That cuts down on the end-of-month calls asking where things stand. The full rundown is on the client portal page.

The same portal is where clients sign quotes and request new ones, so the signed contract and the final invoice sit in one place for them.

Deadlines after the work ends

The end of the work starts a short clock. Quebec’s legal hypothec for construction exists without registration, but it only survives for 30 days after the work ends. To keep it, a notice has to be registered at the land registry and served on the owner within that window. It then lapses six months after the end of the work unless an action has been published.

OKTO PSA sets a reminder on the project: a deadline 30 days after the end of the work, which you can adjust. The software doesn’t produce any legal document. It reminds you of the date; the notice itself is for your lawyer or notary. The legal hypothec guide walks through the steps and what changes for a subcontractor or supplier.

What about your accounting software?

OKTO PSA doesn’t replace your accounting software. It prepares and sends project invoices, tracks holdbacks and change orders, and keeps the project history. Bookkeeping, financial statements and bank reconciliation stay with your accountant.

For a quick question, OKTHAV, the built-in assistant, answers with your own numbers: “how much is left to bill on this project?” or “which holdbacks are due for release this month?” You can ask from your phone, on site.

The easiest way to judge is to try it on a real case. The interactive demo doesn’t need a long sign-up, and our team handles the data migration if you decide to go ahead.

Sources: Civil Code of Québec, LégisQuébec, Building Act, LégisQuébec, Régie du bâtiment du Québec, displaying your licence, Government of Québec, prompt payment, Revenu Québec, calculating taxes, checked on October 27, 2026.