Progress Claims in Construction

A progress claim is a periodic invoice submitted by a contractor or subcontractor under a construction or services contract, claiming payment for work completed during a defined period. Unlike standard supplier invoices where the deliverable is a product or discrete service, progress claims reflect partially completed work -- making verification more complex and the AP team's relationship with the project or site team more important.

Progress claims are typically submitted monthly (often at month-end or on a defined claim date in the contract) and must reference the contract, identify the work completed, state the value claimed in the period, show any retention withheld, and calculate the net amount payable. Under most construction contracts, the principal contractor has a defined period -- often 10 to 15 business days -- to issue a payment certificate or payment schedule, which is the formal acknowledgment of what amount will be paid and when.

What AP teams verify in progress claims

Progress claim verification differs from standard invoice verification because the quantity and quality of work completed -- not just the arithmetic accuracy of the invoice -- must be assessed. The verification process typically involves: the contracts or project team confirming what work has actually been completed in the period (the quantity surveyor's role on large projects), the AP team checking that the claim amount matches the payment certificate issued by the project team, and finance confirming the retention calculation, any previous payments applied, and the net payable.

AP teams that process progress claims without confirmation from the project or site team that the claimed work is complete are taking on payment risk: a claim for work not yet done may be legitimate under the contract (if payment is tied to milestones rather than completion) or it may be an overbilling that will need to be recovered later. The AP team's role is to ensure that each payment matches an authorised payment certificate rather than making independent judgments about the value of work performed.

Variations and their impact on progress claims

Progress claims often include amounts for variations -- changes to the original scope of work that have been instructed or agreed under the contract. Variations may be formally approved through a contract variation order or may be in dispute. Unapproved variations included in a progress claim should not be paid before the variation is resolved, but the contested amount should be formally acknowledged in the payment schedule response to preserve the contractual relationship and comply with SOPA obligations.

Tracking variations through the AP process requires that claims are reviewed against both the original contract scope and any approved variation orders. AP systems that can record multiple payment components per claim -- base contract value, approved variations, disputed items, retention -- provide a clearer picture of the true contract position than systems that record only the net payment amount. This level of detail becomes important at project close when reconciling what has been paid against what the contract specified.