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.

How to Create

The Payment Application Received document is generated from the Subcontractor Agreement.

• Project Costing → Subcontractor Management → Payment Application Received.

• Purchasing→ Subcontractor Management→ Payment Application Received.

Main Tab

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.

Services Tab

service tab description need to do properly. need to group as columns descriptions. as it is in the software. Agreement (Qty/amount), Payment application (Previous qty/ Previous amount/ Precious %, Current %, Cumulative %) and after that quantity, amount ant etc.
- we do not have retention VAT rate column. but you described this.
- did not described retention vat.

The Service tab provides a detailed breakdown of all work items or services being claimed 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 - item reference and Description of this work or service performed.

• UOM - Unit of measure.

• Price - The agreed unit rate 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)

1. 1. Quantity - The total number of units of work agreed in the SA for this item.
   2. Amount - Total value based on the linked Subcontractor Agreement.

• Payment Application

1. Previous Quantity
2. Previous Amount 
3. Previous %
4. Current %
5. Cumulative %

• 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

  1.  Total (Before retention)

  2. Retention %-Rate used to calculate the retained amount

  3. Retention Amount- The actual monetary value withheld based on the retention percentage

  4. Retention VAT- VAT amount 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)-The original contracted quantity and value under the Subcontract Agreement.

• Payment Application (Qty / Amount) - The quantity and amount the subcontractor is claiming for payment in the current application.

• Payment Certificate (Qty / Amount) - The quantity and amount approved and certified after review of the subcontractor’s claim.

• Invoiced (Qty / Amount) - The quantity and amount that have already been invoiced based on certified work.

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, material supply recoveries, advance recoveries, or other contractual adjustments. Each deduction reduces the total payable amount to the subcontractor.

• Item-Name of the material or service being billed.
• Content / Description-Details or description of the item.
• Quantity-Amount being billed.
• UOM (Unit of Measure)- Measurement unit for the quantity (e.g., Litre, Hour).
• Price (Unit Price)-Cost per unit of the item.
• VAT %-Tax percentage applied to the item.
• VAT Amount-Tax amount calculated from VAT %.
• Amount (Net Value)-Total amount before tax (Quantity × Price).
• Total Amount (Gross Value)-Amount including VAT (Net + VAT).
• Subcontractor WBS-Project Work Breakdown Structure code used to allocate cost to the correct project activity.
• GL Account-Financial account to which the expense or revenue is posted.
• Department-Responsible company department for this cost.
• Business Activity-Internal reporting classification category.
• Income Item / Cost Code-Used for grouping costs or revenue by type.
• Comment-Optional notes or remarks about the line.

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.