Progress billing and retainage
Pay applications from the schedule of values, every month.
A general contractor on a $4.2 million job bills monthly against a schedule of values, holds 10% retainage, and releases it at substantial completion. Apex keeps the schedule, takes percent complete line by line, works out retainage, and drafts the pay application for the project manager to sign.
The schedule of values
Every line of the contract, its progress and its retainage.
Each line of the schedule carries its scheduled value, work completed to date, materials stored, retainage held and the balance to finish. The pay application is built from it.
- Change orders
- Approved change orders are added as lines, so the contract sum stays current.
- Stored materials
- Materials on site or in storage are billed where the contract allows.
Each billing period
One pay application, start to finish.
- 01
Enter progress
The project manager enters percent complete or quantity installed per line, or Apex takes it from job cost data in the ERP.
- 02
Calculate
This period's billing, retainage at the contract rate, and the amount due are worked out line by line.
- 03
Review and sign
The draft pay application waits for the project manager, then goes to the owner or general contractor in the format they require.
- 04
Post
Once approved, the invoice is written to the ERP, with retainage held as a separate receivable.
Retainage
Retainage held, tracked and released, by the contract's terms.
Rates that change
10% until 50% complete, then 5%, if the contract steps down. Apex applies the rate in force each period.
Held separately
Retainage receivable is tracked apart from current billing, so it is not mistaken for overdue.
Release
At substantial completion or per line, release is billed as its own invoice once a person approves it.
Subcontracts
Retainage you hold from subcontractors can be tracked alongside what owners hold from you.
Revenue
Billing is not revenue, and Apex keeps them apart.
Progress billing records what you have billed. How revenue on a long contract is recognized is your accountant's judgment.
- Billing
- Calculated from the schedule of values and approved progress
- Retainage
- Billed but held, tracked as a separate receivable
- Revenue policy
- Owned by your accountant, who signs off each close
- Percentage of completion
- Modeled in Apex, planned for a later release
Agents propose, people approve
The agent drafts. A person decides.
A billing agent reads the contract and drafts the schedule of values and retainage terms, then each month drafts the pay application from the progress entered. The project manager reviews and approves every pay application before it is sent.
Every agent stops at an approval gate until it has earned its way out of one. Nothing releases cash, commits spend or touches a customer without a person saying so.
Your dataModels that read your data run inside your environment, behind your firewall. No client data reaches a frontier lab.
Start here, keep the foundation
Start with progress billing and retainage. Add the rest without starting over.
Start with progress billing on your active jobs. Apex brings your customers, projects, open invoices and job costs down from the ERP into your Ferrata foundation, so retainage already held is carried in. When you add tender response or revenue recognition, they work from the same jobs.
FAQ
Questions, answered plainly.
What is progress billing?
Progress billing is invoicing a long contract in stages as the work is done, rather than all at the end. In construction it is usually monthly, against a schedule of values that splits the contract sum into lines, each billed by its percent complete.
What is retainage?
Retainage is a share of each progress payment, often 5% or 10%, that the owner or general contractor holds back until the work is substantially complete. It is billed but not paid until it is released, so it needs to be tracked separately from current receivables.
Can Apex produce pay applications in the format owners require?
Apex drafts pay applications with the standard continuation sheet fields (scheduled value, work completed, materials stored, retainage, balance to finish). The exact form layout an owner requires is set up per customer.
Where does percent complete come from?
The project manager enters it per line, or Apex reads quantities installed or job cost data from your ERP where your setup records them. Either way, a person reviews progress before it is billed.
How are change orders handled?
An approved change order is added to the schedule of values as a new line or an adjustment to an existing one, so the contract sum and every later pay application include it.
Does Apex recognize revenue on percentage of completion?
Not yet. Percentage-of-completion recognition is modeled and planned for a later release. Today Apex keeps billing and retainage accurate; how revenue on a long contract is recognized is your accountant's policy, and they sign off each close.
Is retainage release automatic?
No. Release is drafted when the contract's conditions are met, such as substantial completion, and waits for a person to approve it before an invoice is created.
Related in Apex
- InvoicingInvoices calculated in Apex, checked against the PO, posted to your ERP first.View
- RFQ and tender responseImport the buyer's line list, price it from your book, and submit on time.View
- Index-linked pricingPrices tied to steel, fuel or CPI, with caps and floors, re-priced on set dates.View
- Revenue recognitionRevenue schedules computed from your policy, journals posted to the ERP after review.View
- ConstructionTenders, schedules of values, progress billing and retainage.View
From Ferrata Labs
- Ferrata in constructionContractors, tenders and site operations.
- Swift, the order agentTurns customer purchase orders into clean sales orders.
- Human in the loopWhy every consequential action waits at an approval gate.
- Book a discovery callThirty minutes on one workflow, and an honest answer on where to start.
Start with progress billing and retainage, or talk it through first.
Thirty minutes with Ferrata Labs on one workflow. You leave with a view of where Apex fits, and an honest answer if the sequencing is wrong and you should fix something else first.
Your pricing, approval and billing rules are your advantage, and they stay yours. Apex is configured to the way you sell and bill. You are not handing over a playbook or fitting into a template.