Construction - Sub-Contractor Payment Application

The sub-contractor's payment application is received and logged against the relevant job and works order. The period covered and total claimed are confirmed.

The claimed amount is checked against the agreed sub-contract value, programme of works, and any approved variation orders. Out-of-scope or incorrect rate items are identified.

The certified amount is agreed with the sub-contractor. Any disputed items are resolved before certification. The agreed amount and basis for deductions are recorded.

A purchase order is raised for the certified amount, or an existing PO is updated for this application period. The application period and number are recorded for traceability.

The sub-contractor's invoice is matched against the PO and the certified amount. Discrepancies are flagged before approval - invoices that exceed the certified figure are returned for correction.

The matched invoice is approved for payment. Job cost records are updated to reflect the sub-contractor payment for this period, keeping running costs accurate.

Payment is confirmed and recorded against the PO and job. If retention applies, the net payment amount is verified and the retention balance is logged separately.

Sub-contractors submit invoices for their full application amount after the main contractor has already agreed a lower certified figure, creating a mismatch that delays payment and requires back-and-forth before the invoice can be approved.

Payment applications are not checked against approved variation orders, so disputed items are identified only after payment has been processed - making recovery complicated and damaging the sub-contractor relationship.

Job cost records are not updated after each sub-contractor payment period, so mid-project cost reviews use incomplete figures and variance against budget is understated until the final account.