Billing an engagement by milestones
How an accounting firm bills a long engagement in agreed milestones, invoices each from the engagement page, and why none can be billed twice.
By Achekam · · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
An audit that runs from planning in one quarter to sign-off two quarters later is a long time for a firm to carry the cost of its people. A due diligence, a restructuring or a first-year clean-up can be the same. If the whole fee waits for the final invoice, the firm finances the client's engagement for months.
Milestone billing breaks the fee into parts tied to points in the work that both sides can recognise. The client pays as progress is made, the firm's cash keeps pace with its effort, and nobody faces one large invoice at the end.
When milestones suit the work
Milestones fit work with clear stages and a meaningful time between them. They suit less well work that is short, or so routine that a monthly fee is simpler.
Good candidates:
- Audits, split for example into planning, interim work, final fieldwork and the signed report.
- Reviews and compilations for clients whose records arrive in stages.
- Advisory projects with defined deliverables, such as a valuation, a business plan or a restructuring report.
- Clean-up and catch-up work where several years' books are brought up to date one by one.
Poor candidates are monthly bookkeeping and payroll, which are better as recurring fees, and short jobs that finish within a single billing cycle.
The best milestones are events, not dates. "Interim fieldwork completed" can be checked; "the end of May" invites argument if the client's records arrived late. Where a date is used, tie it to the event: "on completion of interim fieldwork, expected by the end of May".
Agreeing them in the proposal
Milestones need agreement before the work starts, not halfway through. Write them into the fee section of the proposal and the engagement letter:
- Name each milestone as an event both sides can recognise.
- State the amount, or the share of the fee, payable at each.
- Say what happens if the work stops before a milestone is reached.
- Say how extra work outside the agreed scope will be charged.
When staff build a proposal or quotation in Achekam, the fee lines are priced by a person, VAT is added at the standard rate for the firm's jurisdiction, and the total is recalculated from the lines. Make sure the milestone amounts in your wording add up to the same total.
When the engagement letter is signed, Achekam turns the lead into a client, activates a service for each mapped quotation line and drafts, but does not issue, the invoice. Recurring lines go on a schedule. A milestone fee is not recurring, so expect to raise each one yourself as it falls due.
Invoicing from the engagement page
When a milestone is reached, staff invoice it from the engagement's own page. Achekam refuses to invoice the same milestone twice. That refusal matters more than it sounds: on a busy engagement with a manager and a partner both handling billing, it is easy for a milestone to be invoiced by one while the other is preparing the same invoice. The second attempt is stopped.
The invoice then sits in the firm's receivables ledger on the server, with receipts, credit notes and statements of account, under BILLING & FINANCE. A statement of account can be downloaded as a PDF or e-mailed, which gives the client a running picture of what has been billed and paid as the engagement progresses.
A worked example in words
A firm agrees an audit fee in four milestones: on acceptance of the plan, after interim work, after final fieldwork, and on signing the report. Interim work finishes, and the manager invoices the second milestone from the engagement page. A week later, the partner, not having seen it, tries to invoice the same milestone from the same page. Achekam refuses. The partner checks the receivables ledger, sees the invoice already issued, and moves on. The client receives one invoice, not two, and the firm avoids a credit note and an apology.
The menu entry that does not list them
One labelling trap: there is a BILLING & FINANCE > Billing Milestones menu entry, and it does not list the milestones held on the server against engagements. If a member of staff opens that menu entry looking for the audit's milestones, they will not find them there.
Tell the team plainly: milestones are seen and invoiced from the engagement's own page. Until that menu entry shows the same milestones, do not use it to check what has been billed.
Milestones versus retainers
The two are easily confused, because both spread a fee over time.
| Milestones | Retainers | |
|---|---|---|
| Triggered by | Reaching a point in the work | The passing of a period |
| Suits | Projects with stages | Recurring monthly work |
| Raised in Achekam | From the engagement page | Under Retainers, as draft invoices or by a billing run |
| What Achekam enforces | A milestone cannot be invoiced twice | A partner authorises the billing run |
Recurring fees from signed contracts appear under Retainers, where staff raise each period as a draft invoice or a partner authorises the daily billing run to issue them. Achekam does not collect either kind by debit order or card. The retainer side is covered in retainers and the billing run.
On the accounting side, billing ahead of or behind the work done creates balances the firm should understand. ACCA's article on IFRS 15 contract assets and contract liabilities explains the balances that arise when revenue is recognised before or after the customer pays.
Whether a milestone fee is fixed or estimated from time is a separate choice; fixed fees or billing by time weighs the two.
For the next long engagement you propose, define the milestones as events in the engagement letter, agree who raises each invoice, and point the team to the engagement page rather than the menu.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
