Projects · Daily operations · 10 min read

Bill the customer and certify progress claims

Invoice billing steps, time and material, cost plus and retainers, and run progress claims with retention and advance recovery.

Before you begin

The project needs a Customer (set it in Edit Project): 'The project needs a customer to invoice.' You need project.billing.create. Open the project's Billing tab, or Commercial > Billing & Invoicing. The project's Billing method (Fixed Price, Milestone, Time & Material, Progress %, Quantity / BOQ, Cost Plus, Retainer, Recurring, Manual, Hybrid) suggests which tools to use.

Steps: invoice a billing step

1. In the billing plan, check each step: name, method, percentage or fixed amount, milestone and due date. Add one with Billing step.
2. When a step is Ready, press Create Invoice. A step linked to a milestone becomes Ready when that milestone is completed. Before then: 'Complete the milestone before invoicing it.'
3. The system creates a draft customer invoice for the step. The step becomes Invoiced.

Example: contract AED 400,000 with steps of 10, 20, 40 and 30% gives invoices of 40,000, 80,000, 160,000 and 120,000.

An invoiced step is history: it cannot be edited or deleted, and cannot be invoiced twice ('This billing step is already invoiced.').

Steps: other billing methods

• Time and material: press Invoice time & material. All approved billable time and expenses not yet billed go on one draft invoice, grouped by person and rate. They become Billed and are never invoiced again. With nothing to bill: 'There is no approved billable time or expense to bill.'
• Cost plus: press Invoice cost plus. The system bills the actual cost since the last cost-plus invoice plus the Cost-plus markup % from Edit Project. A 15% markup on AED 20,000 of new cost gives AED 23,000.
• Retainer or recurring: enter the month (YYYY-MM) and press Invoice the month. Set the monthly fee on Edit Project first. A month can be billed only once.

Steps: advance, then a progress claim

1. To record money received up front, press Record advance, enter the amount and a reference, and save. It posts to Customer advances.
2. Press Progress claim (or BOQ claim for quantity-based projects) and enter the cumulative % and the period end. Press Create application.
3. The system calculates the claim. Press Submit, then Reviewed. Approvers receive a notice.
4. Press Certify. Enter Certified by, the name of the customer's representative. If you raised the claim yourself, this name is required: 'Record who certified it (the customer's representative).'
5. Press Create Invoice. A draft invoice for the gross certified work is created, and posted at once when possible.

Worked example

Contract AED 1,000,000, retention 10% capped at 5% of the contract (AED 50,000), advance recovery 20%, advance received AED 100,000. First claim at 30% cumulative: work completed 300,000. Retention is the smaller of 30,000 and the cap, so 30,000. Advance recovery is the smaller of 60,000 and the balance 100,000, so 60,000. Net due 300,000 - 30,000 - 60,000 = 210,000.

Second claim at 50%: this claim is 200,000. Retention is the smaller of 20,000 and the room under the cap (50,000 - 30,000), so 20,000. Recovery is the smaller of 40,000 and the balance 40,000. Net due 140,000.

What happens next

The invoice is for the gross work. The project's own journals then move the retention to Retention receivable and the recovery off the customer advance, so the customer owes the net due. If Accounting posts the invoice later, press Post retention on the claim afterwards ('Post the claim's invoice first.').

When the defects period ends, press Release retention on the claim. The retention moves back to the customer's receivable. Pressing again: 'This retention is already released.'

Good to know

• Only one application can be open: 'Finish the open application first.' Progress cannot fall below the last certified claim: 'Progress cannot go back from the last certified claim.'
• A BOQ claim cannot exceed 110% of a line's quantity.
• The project's Retention % and Advance % (set in Edit Project) drive the calculation, together with the retention cap and advance recovery percentages held on the project. The cap and recovery percentages are not on the Edit Project screen; ask your administrator if they need changing.
• Collections and overdue invoices show on the Billing tab and in Commercial > Collections.