Free tool
Create a variation order for extra or changed work. The contractor invoice generator builds the claim itself.
Why it matters
Contractors are paid by claim, not by one final invoice. A clear claim is paid faster. A vague claim is questioned and delayed.
Unapproved variations are a common reason work goes unpaid. Written approval before you start protects you.
The steps
- Read the contract. Find the claim dates, the claim form, who to send it to and the payment terms.
- Record the work done. Measure the percentage complete or the quantities done to date. Support it with photos or dockets.
- List approved variations. Add each approved variation with its number, a short description and the agreed price.
- Work out the claim. Contract value plus approved variations, times percentage complete, less earlier claims, less retention if the contract holds it.
- Write the claim. Show the contract, the claim number, the period, the work done, the amount claimed and GST. Make it a tax invoice if you are registered for GST.
- Check state law. Each state and territory has security of payment rules on what a claim must say and when it must be sent. Check yours before you send.
- Send it on time and keep proof. Send by email to the named person. Keep the sent copy.
- Follow the variation process. Get the client to sign a variation order before the extra work. Keep it with the claim.
Worked example
Example Concrete Pty Ltd has a A$48,000 contract with one approved variation of A$2,000. Work is 60% complete. Earlier claims total A$14,400. Retention is 5%.
| Line | Working | Amount ex GST |
|---|---|---|
| Contract plus variation | 48,000 + 2,000 | A$50,000.00 |
| Value of work done | 50,000 x 60% | A$30,000.00 |
| Less earlier claims | -A$14,400.00 | |
| Claim before retention | 30,000 - 14,400 | A$15,600.00 |
| Retention held | 15,600 x 5% | -A$780.00 |
| Amount payable | 15,600 - 780 | A$14,820.00 |
GST of A$1,560 is calculated on the claim of A$15,600. The retention schedule shows A$780 held on this claim. Check the contract for how retention and GST are treated.
Common mistakes
- Doing variation work before it is signed.
- Claiming without supporting records.
- Missing the claim date in the contract.
- Ignoring the state security of payment rules.
Next step
Use the Variation order generator first. Then see how to record retention on a subcontractor bill.
Common questions
What is a variation?
A written change to the work, scope or price in the contract.
Can I claim for work not yet done?
Only if the contract allows claims for materials or milestones. Read the contract.
Do I need a tax invoice with a claim?
If you are registered for GST, your customer needs one to claim the credit.
Related how-to guides
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