Milestone billing is common in professional services and implementation projects where payment is triggered by the achievement of predefined deliverables rather than by calendar dates. It ensures revenue is recognized as work is completed.

Example: A SaaS implementation project is billed in three milestones: 30% on contract signing, 40% on go-live, and 30% on final user acceptance testing. Each invoice is generated automatically when the project team marks the corresponding milestone as complete.