Progress payments divide a larger commercial obligation into stages rather than making one payment at the beginning or end. The challenge is ensuring each side understands when money is secured and when it becomes payable.
Why use staged payments?
Staging can align payment with agreed milestones, deliveries or phases of work. It can reduce the size of a single payment event, but it does not remove the need for a clear contract and objective payment terms.
The payer’s concern
The payer may not want to release the next payment before the relevant stage has been reached.
The payee’s concern
The supplier or contractor may not want to continue committing labour, materials or capacity without confidence that the agreed payment is available.
Where escrow may fit
For an eligible arrangement, escrow can separate the act of securing funds from later settlement. The exact transaction structure must fit the underlying contract, applicable GoEscrow product and any legal requirements.
Construction and regulated payment regimes
Building and construction payments may be subject to state or territory legislation, contractual requirements, security-of-payment processes and trust or retention requirements. GoEscrow should not be used to bypass a mandatory regime.
Related information
Read Upfront Payments and Deposits, Paying a Contractor or Tradie and Business Escrow in Australia.
Product information
Review the Product Disclosure Statement, Financial Services Guide and Terms of Use.