Milestones are tools used in project management to mark specific points along a project timeline. These points may signal anchors such as a project start and end date, or a need for external review or input and budget checks.
Milestone is kind of a contract that is used by the buyer. Buyer will make contract that depends on the payment. When a buyer post a quote and seller bids for the quote. If both the seller and buyer accepted the quote, then the milestone management is done.
Milestones are frequently used to monitor the progress, but there are limitations to their effectiveness. They usually show progress only on the critical path, and ignore non-critical activities. It is common for resources to be moved from non-critical activities to critical activities to ensure that milestones are met. This gives the impression that the project is on schedule when actually some activities are being ignored.
How does Milestone work?
Let’s consider a project with 3 Milestones. The first milestone contains the first part of the project once that is completed then the seller will ask for payment for that milestone. It may be auto deduct or manual based on the buyer. In some cases it may be amount but in some cases it is based on the percentage it differs according to the requirement.
In Manual case, once the first milestone is completed then seller will request for the payment. Once the buyer approves it then payment will be processed.
In case of Auto deduct, once the first milestone is completed then the amount will be automatically deducted from the buyer.
This is carried out throughout the entire milestone. The final payment will be processed at the end of the milestone that is at the time of project completion.