The Payment Application is used to request payment for completed project works, based on the progress achieved. It links project estimation, actual progress, and contractual terms to calculate the amount due for the current period. This document forms the basis for generating the Payment Certificate and eventually the Progressive Invoice. 

It can be accessed from

Project costing→ Project Progress Reports → Payment Application

How to Create the Document

Click Create and select the required project from the list.

The system fills in the details automatically based on the project’s structure and settings. This includes contract-related information like billing terms, retention rules, and VAT. Users can still manually adjust progress percentages, discounts, retention, amounts, and other relevant fields if needed.

If a project progress report is added as the basis, the system can use it to fill in the document. A confirmation message will appear before replacing any existing data.

Main Tab

• Project - Connects the document to the project and its data.
• Company - The client or contracting company.
• Contract - Taken from the project; includes pricing, retention, and advanced details.
• Entity - Legal entity creating the document.
• Basis - Shows where the data comes from, like a Project Progress Report.
• Retention - Indicates if retention rules are used.
• Ret. VAT at Retention Invoice - If enabled, VAT will be included as part of the retention amount and calculated when the retention invoice is issued.
• Currency and Price Settings - Taken from the contract.
• Comment - Optional note or remark.

Select the invoice type to determine the applicable structure:

• Progressive - Used for billing based on completed work or project milestones.

• Advance - Used for requesting upfront payments before work begins.

Note: Based on the selected invoice type, the relevant tabs, fields, and calculations will automatically adjust to suit the billing method.

1. If the Progressive option is enabled, the following tabs will be available

Project Structure tab

It displays the list of project tasks with their hierarchy, estimates, progress, and billing details for preparing the payment application.

• Code - WBS code showing task hierarchy.
• Project Task - Name or description of the Task.
• Estimate Qty/Amount - Planned quantity and planned total contract amount for the task.
• Progress Reports Qty/% - Actual completed quantity and percentage based on progress updates.
• Payment Application Previous Qty/Amount/% - This is the amount posted in previous Payment applications.

• Current%  - Percentage of work being claimed in this application.
• Cumulative%  - Total completed percentage, including current and previous.
• Quantity - Calculated from cumulative % and estimate.
• Amount (Excl. VAT) - Net value of current application before VAT.
• VAT% - Tax rate applied (e.g., 5%).
• Total (before retention): Gross amount before applying retention.
  % / Retention / Retention VAT: % indicates the retention rate, Retention is the withheld amount, and Retention VAT is the VAT calculated on that amount, displayed only when the Ret. VAT option is enabled in the retention invoice.
• VAT Amount - VAT on the payable amount after retention.
• Total - Final payable amount (amount minus retention plus VAT).
• Comment - Any additional remarks, if needed.

Note: Some columns are editable, while others are read-only for information only. Editable fields include Price, Current %, Cumulative %, Quantity, and Amount (excluding VAT). All other columns are for reference or calculated values and cannot be edited directly.

Summary linked table

At the bottom of the Project Structure tab, a financial summary section provides a quick view of all key billing values for the current period.

• Estimate Qty & Amount - The original planned quantity and value from the contract or BOQ, used as the baseline.
• Progress Report Qty & % - The completed work so far, shown as quantity or %, based on the latest progress report (can be negative if reversed).
• Payment Application Qty & Amount - The portion of progress being claimed for payment in this application may differ from the actual progress.
• Payment Certificate Qty & Amount - The approved amount from the client or consultant after reviewing the payment application.
• Invoiced Qty & Amount - The value already invoiced, typically matching the certified amount unless split or deferred.

If the "Show Summary for the Selected Row" option is enabled, the summary table will display details based on the parent line that was selected.

Deduction tab

The Deductions tab is used to apply reductions like penalties or back charges before calculating the net payable amount.

• Item / Content-Identifies the specific service, work, or resource being billed.
• Quantity: Indicates how many units are being applied for in this billing cycle.
• UOM (Unit of Measure): Defines the measurement types.
• Price: Unit rate defined in the contract.
• VAT% and VAT Amount: Displays the tax rate and calculated VAT for the selected item. This VAT is not posted for tax liability, as the deduction function creates no VAT accounting entries. Recommended mainly for out-of-scope expenses.
• Amount: The total value before tax, calculated from quantity multiplied by price.
• Total: Represents the complete billing amount, which may include VAT depending on system logic.

Additional Information tab

This tab is for adding extra details related to the project

• Bank Account - Client bank details 

• Additional Data for Print - Custom reference info for printed forms.

• Terms and Conditions - Standard clauses or payment terms.

These fields do not affect accounting, but they ensure clarity in printed documents like the payment certificate and invoice.

2. If the Advance option is enabled, below tabs will be available

When the Advance Invoice type is selected, the Advance tab becomes available, prompting users to enter the required details. After posting the Payment Application, a Payment Certificate can be generated, which serves as the basis for issuing an Invoice designated as an advance. Once this Invoice is paid, the received amount is recorded as a prepayment and can subsequently be offset against a future Invoice.

Advance/ Prepayment offset

When an invoice is generated from a Payment Application and Certificate document marked as an advance invoice type, it is recognized as an advance or prepayment. This amount can subsequently be offset within the Payment Application document.

If only a Payment Application with the advance type is created without the corresponding advance invoice, it will not appear in the offset list. The advance invoice must be paid to be available for offsetting.

While offsetting can occur in the final invoice, including the advance in these documents serves two key purposes:
a) To reflect the advanced impact on the print form
b) To automatically carry forward the advance amount in the prepayment field to subsequent linked documents, such as payment certificates and invoices, thereby eliminating the need for manual selection on each document.

Print form

a) Payment Application- It provides a complete breakdown of all items, including VAT, retention amounts, progress details, and any deductions applied.

b) Payment Application (Summary)- Shows just the key totals like net payable amount, VAT, and advance offsets for a concise overview.