10 Overview to Progress Payments

This chapter contains these topics:

10.1 Objectives

  • To understand how to make progress payments against contracts

  • To enter progress payment vouchers

  • To post a payment against a contract

10.2 About Progress Payments

You make progress payments to your subcontractors as they make progress against their contracts. You draw progress payments from the funds that you commit to a contract.

To make a progress payment you must first enter a voucher into the Subcontract Management system. Vouchers contain the details of a payment and enable you to create a payment that is drawn against the commitments for a contract. After you enter a voucher, you can review it and post it. You can then work with the voucher to change the method that the system uses to process payments. You can also correct a voucher that you enter incorrectly.

In addition, you make progress payments to release some or all of the retainage against a contract. Retainage is a percentage of the committed amount that is held until a specific date after workers complete the contract.

You can enter a backcharge against a contract if you want to decrease the amount you pay against the contract without changing the total amount of the commitment. For example, if an electrician damages the drywall on your job, you can enter a backcharge to deduct the amount of the drywall repairs from the total you pay the electrician. The total amount that is committed to the electrician's contract does not change.

When you are ready to make your payments, you must process your payment vouchers. This creates payment groups to set up as batches for payment and determines the sequence in which the system processes payments.

Complete the following tasks:

  • Enter vouchers

  • Review and posting vouchers

  • Work with vouchers

  • Enter backcharges

  • Correct vouchers

  • Release retainage

  • Process contract payments