The Payment Application Received document is used to record a subcontractor’s claimed amount for work performed under a Subcontractor Agreement (SA). It provides the basis for certifying the value of work completed and, when configured, for recognizing related expenses in the financial accounts.
Captures the general details and linkages of the document
Company- Subcontractor submitting the payment request.
Contract- Contract associated with the subcontractor.
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 -
If the Subcontractor Agreement Basis is set to Recognize Expenses by Payment Application, expense recognition and financial postings occur when the document is approved/posted
GL Transactions:
Dr Expense (based on the linked cost item and analytics)
Cr Unbilled Purchase (liability representing the subcontractor’s claim)
When the subcontractor’s invoice is later received, this liability is cleared to Payables
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.
Type- Indicates the billing method (e.g., progressive billing or advance billing).
Services Tab
Lists work items or services being claimed. Each line reflects part of the subcontractor’s work scope as defined in the SA.
Subcontractor WBS - Related project WBS code for cost tracking.
Item / Content - Description of work or service performed.
UOM - Unit of measure (e.g., m, kg, pcs).
Price - 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.
Payment Application Previous / Cumulative % - Progress history based on earlier applications.
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
Retention %-Rate used to calculate the retained amount
Retention Amount-The actual monetary value withheld based on the retention percentage
Retention VAT %-VAT percentage applied to the retained amount
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 the activity
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
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.
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.
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.
Captures optional references, notes, and classification details such as:
Comments or remarks related to the claim.
Internal document numbering.
Analytical codes or departments for reporting.
