- should be recorded based on subcontractor agreement.
- mainly it is mirroring Payment Application issued, but for SA. meaning is same, but now we receiving requests to certify value of work done by subcontractor.
- structure of page description should be like this:
- How to create
- Main
- Services
- Summary tab
- Deduction
- Advance offset
- Additional information
- keep in mind in this doc we do not use hierarchy of the table it is flat for all subcontractor documents. rest is more or less the same.
- If SA basis marked as recognize Expenses by Payment application, then financial records will be done, based on specified expenses and subcontractor GL accounts and analytics.
The Payment Application Received document records subcontractor claims is used to record a subcontractor’s claimed amount for work completed performed under a Subcontractor Agreement (SA). It serves as provides the basis for certification certifying the value of subcontracted work value completed and, if enabled, expense recognition in when configured, for recognizing related expenses in the financial accounts.
How to Create
The Payment Application Received document is mainly created from the Subcontractor Agreement using the generate feature, which automatically transfers all default information from the subcontractor agreement.
Alternatively, it can also be created from the Project Costing and Purchasing module.
- Project Costing → Subcontractor Documents Management → Payment Application Received.
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- Purchasing→ Subcontractor Documents → Management→ Payment Application Received.
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Captures the general details and linkages of the document.
Company – Defines the entity receiving the subcontractor’s payment claim- Subcontractor submitting the payment request.
Contract – Reference to the related main contract (if applicable).
Entity – The subcontractor (supplier) submitting the claim.
Subcontractor Agreement Initial – Linked SA under which the work was performed.
Project – Project or subproject to which the application belongs.
Basis – Optional field for classification or grouping.
Requisition – Source requisition (if created via approval workflow).
Delivery Date – Indicates the period or cut-off date for the claim.
Options –
Apply Retention
Calculation VAT at Retention Invoice
Apply Retention / VAT on Retention - Option to hold back a portion of the payment to ensure work quality; VAT is to be calculated on the retained amount.
Recognize Expenses in Payment Application Received-
- Contract associated with the subcontractor.
If the Subcontractor Agreement Basis is
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set to Recognize Expenses by Payment Application, expense recognition and financial postings occur
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when the document
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is approved/
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posted
GL Transactions:
Dr
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Expense (
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based on the linked cost item and analytics)
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Cr
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Unbilled Purchase (liability
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representing the subcontractor’s claim)
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When the
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subcontractor’s invoice is later received, this liability is
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cleared to Payables
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Subcontract Agreement Initial - Reference to the original subcontract agreement document.
Project - Project linked to the payment claim.
Delivery Date - Indicates the time period or cut-off date for the claimed work.
Services Tab
Lists The Service tab provides a detailed breakdown of all work items or services being claimed . Each line reflects part of the subcontractor’s work scope as defined in the SA.
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# / Subcontractor WBS – Related project WBS code for cost tracking.
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by the subcontractor in a payment application.
Subcontractor WBS - Optional code to identify work as defined by the subcontractor.
Item - BOQ line service item.
Content - Description of this work or service performed.
UOM – Unit - Unit of measure (e.g., m, kg, pcs).
Price – Agreed - The agreed unit rate from the SA.
Agreement Qty / Amount – Original agreed quantity and value.
Payment Application (Qty / Amount / %) – Quantities or values being claimed in this application.
Previous / Cumulative % – Progress history based on earlier applications.
Summary Tab
Shows consolidated totals for the selected service line and the entire document.
Agreement (Qty / Amount) – Original scope and value under the SA.
Payment Application (Qty / Amount) – Current certified work claimed.
Payment Certificate (Qty / Amount) – Approved and certified portion.
Invoiced (Qty / Amount) – Portion already invoiced by the subcontractor.
At the bottom of the form:
VAT – Calculated based on the VAT rate of each line.
Retention – Retained portion of the payment.
Total Due – Net payable amount after VAT, retention, and advance offsets.
Deduction Tab
(Optional, same logic as Payment Application Issued)
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for this work item as defined in the Subcontract Agreement (SA).
Agreement - This section shows the quantities and values that were originally agreed upon in the Subcontractor Agreement (SA)
- Quantity - The total number of units of work agreed in the SA for this item.
- Amount - Total value based on the linked Subcontractor Agreement.
Payment Application
- Previous Quantity- Cumulative quantity of work approved in all prior payment applications.
- Previous Amount -Total value of previously approved quantities.
- Previous % -Percentage of progress achieved up to the last approved application.
- Current % - Progress percentage being claimed for the current application document.
- Cumulative % - Total progress achieved to date, including previous and current claims.
- Quantity - Units of work being billed
Amount - Gross value of work before retention and VAT.
- VAT % - Percentage of VAT applied to the billed amount
Retention - Portion of the payment withheld to ensure contractual and quality compliance
- Total (before retention) - The total billed valuebefore retention is deducted.
- Retention % - Rate used to calculate the retained amount
- Retention - The monetary value withheld based on the retention percentage.
- Retention VAT - VAT amount applied to the retained portion.
VAT Amount - Total VAT calculated (including VAT on retention where applicable).
Total - Net payable amount after retention and VAT calculations.
Project Task - Specific task the work relates to within the project.
Project WBS - Work Breakdown Structure code to classify the tasks within the project hierarchy.
Requisition - Original request or source of the work order.
Department - Department responsible for or related to the deduction.
Business Activity - Work category or operational classification.
Expense Item - Cost or budget category used for expense tracking.
Comment - Additional text or details can be added in the field.
Summary Tab
The Summary section shows consolidated totals for the currently selected service line and for the entire document.
Agreement represents the original contracted values from the Subcontractor Agreement (SA).
- Quantity - The total quantity of work originally agreed with the subcontractor.
- Amount - The total contract value for that quantity based on the SA.
Payment Application Shows what the subcontractor is claiming in the current payment application, plus previous approved claims (cumulative).
- Quantity - The total quantity of work claimed to date.
- Amount - The total monetary value claimed to date.
- Payment Certificate shows what has been reviewed, approved, and certified
Quantity - The amount of work certified as actually completed.
Amount - The certified value based on approved quantities.
Invoiced - Represents the portion that has already been invoiced (billed) by the subcontractor based on certified work.
- Quantity - The amount of certified work already invoiced.
- Amount - The total value that has been billed to date.
If "Show Summary for the Selected Row" is enabled, the summary displays only the totals related to the specific subcontract service line currently selected. When disabled, the summary shows totals for the entire subcontract payment application document.
Deduction Tab
This tab is used to record deductions applied to the subcontractor’s claim, such as :
Penalties or adjustments.
Material supply recoveries.
Other contractual deductions.
Each deduction reduces the total payable value.
Advance Offset
If the subcontractor received an advance payment earlier, the corresponding balance is automatically deducted here.
The offset logic is based on:
Linked Advance Invoice Received.
Proportionate adjustment against the certified value.
Additional Information Tab
Captures optional references, notes, and classification details such as:
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Comments or remarks related to the claim.
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Internal document numbering.
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penalties, material supply recoveries, advance recoveries, or other contractual adjustments
Item - Name of the material, service, or deduction type.
Content - Details or description of the deduction.
Quantity - Quantity being deducted.
UOM (Unit of Measure) - Measurement unit for the quantity.
Price - Unit rate of the item.
VAT % - Tax percentage applied to the item.
VAT Amount - Tax amount calculated from VAT %.
Note: VAT % and VAT Amount in this tab are for calculation purposes only and will not be posted as output VAT. Proper VAT posting can be done by issuing the Invoice document for subcontractor's deduction-related transactions.
Amount - Total deduction amount before tax (Quantity × Price).
Total Amount - Total deduction amount including VAT (Net + VAT).
Subcontractor WBS - Optional code to identify work as defined by the subcontractor
GL Account - Ledger account where the deduction is posted.
Department - Department responsible for or related to the deduction.
Business Activity - Type of business activity associated with the deduction
Income Item - Income category or account linked to the deduction
Comment - Free-text field for notes or explanations about the deduction
Advance Offset
Only the advance payment is recorded as an offset balance and entered into the prepayment field, regardless of the payment method (bank transfer, cheque, etc.). This advance is linked to the current document so that any subsequent linked document automatically carries forward the prepayment. The final accounting offset occurs in the Invoice Received document.
Additional Information Tab
This tab is for adding extra details related to the project
In Doc. # and date- Internal or reference document number linked to this payment application.
Department- Department responsible for reviewing and approving the subcontractor’s payment.
Responsible- Person who prepared or approved the payment record.
Terms and Conditions Dropdown- Stores predefined T&C templates for printing.
