Most articles about construction billing explain each document on its own. This one follows a single job through all of them, so you can see how the estimate becomes the contract, how a change order moves it, and how progress draws, tax and holdback add up to exactly what the client agreed to pay.
The job is fictional: an ensuite renovation in Edmonton, Alberta, with made-up rates. The arithmetic is not made up. Every figure here comes from the same pricing, tax and billing functions BuildersBridge runs, so it reconciles to the cent. The same job appears in our free estimate, change order, job costing and schedule of values templates if you want to follow it in a spreadsheet.
1. The lead
A referral calls about retiling a shower and replacing the vanity, toilet and fixtures, roughly an $11,000 job. It goes into the pipeline as a new lead with an email and a phone number, which gives it a score of 22 out of 100. The score is a fixed rule (stage, job size, whether you can reach them), not a prediction. After the site visit and the estimate it sits at 77.
2. The estimate
Eight lines: demolition, tile labour, a licensed plumber, painting, tile, setting materials, a $2,800 fixture allowance and a disposal bin. Their cost is $9,407.00. At 18% markup the price before tax is $11,100.26, Alberta GST at 5% is $555.01, and the client sees $11,655.27.
The exclusions matter as much as the lines: fixtures above the allowance and anything found behind the walls are priced as change orders, and the permit is the owner's. The free scope of work template has the full list for this job.
3. Approval sets up the job
The client approves the estimate. Two numbers now drive the job: the contract value of $11,100.26, which is what you bill against, and the budget of $9,407.00, which is what the job is meant to cost you. In BuildersBridge both are set from the approved estimate; the lead moves to won (score 100).
4. A change order
At the tile layout review the client adds a recessed niche and a frameless glass door. You price them at $1,450.00 before tax ($72.50 GST) and the client approves the change order before the work starts. The revised contract is now $12,550.26: the original contract plus the change before tax.
Approval raises the contract, not the budget. If the change adds about $1,100 of cost, add that to the budget yourself, or the profit figure later will look better than it is.
5. Progress draws
The job is billed in three draws against the revised contract. Holdback of 10% is retained on each, which is the rate in this example; the rate and release rules depend on the province and the contract.
- Progress draw 1 (2027-03-29): $2,622.08 before tax, GST $131.10, invoice total $2,753.18. Holdback of $262.21 is retained, so $2,490.97 is due now.
- Progress draw 2 (2027-04-26): $2,091.08 before tax, GST $104.55, invoice total $2,195.63. Holdback of $209.11 is retained, so $1,986.52 is due now.
- Final draw (2027-05-31): $7,837.10 before tax, GST $391.86, invoice total $8,228.96. Holdback of $783.71 is retained, so $7,445.25 is due now.
6. Releasing the holdback
With every draw paid except its holdback, $1,255.03 is retained. Once the holdback period ends and no liens are registered, a release invoice bills exactly that amount. It carries $0.00 of tax, because BuildersBridge charges tax on each draw in full, holdback included. When tax on holdback becomes payable depends on your province and the CRA's rules, so confirm the treatment with your accountant.
7. Does it reconcile?
Before tax, the three draws bill $12,550.26, which is the revised contract, so the change order was billed exactly once. GST across the draws is $627.51. The client paid $13,177.77 in all, against $13,177.77 invoiced, leaving $0.00 outstanding and $0.00 of holdback still held.
With the change order's cost added, the budget is $10,507.00. BuildersBridge never forecasts below the budget, so its forecast is $10,507.00 and projected gross profit $2,043.26 (16.3%). The job costing template's example adds an estimate of the cost still to come, including a tile overrun, and forecasts $10,751.00, which leaves $1,799.26. The difference is the overrun, and it is visible before the final draw.
What this looks like in a spreadsheet, and in software
Every step above can be done in the free templates: estimate, change order, schedule of values, progress claim and job costing. The risk in a spreadsheet is not the arithmetic, it is keeping five files in agreement. In BuildersBridge the approved estimate, the change order and each draw are one job record, so the revised contract, the holdback and what is left to bill are worked out once.