Progress claims: claiming a job in stages, with retention

Progress claims is an add-on, included in Pro and Enterprise, that an owner switches on in Settings, then Integrations & Add-ons. It invoices a job in stages: a deposit, the frame, lock-up and so on, or a percent of the work complete. Every claim is an ordinary invoice, so its number, approval before sending, payment terms, PDF, reminders and your accounting system all work the same way. A claim is a document on the job and never changes the job’s status.

Once Progress claims is on, a job with an accepted quote or a value has a Claims section, right after Variations. Anyone who can see invoices sees it. Owners and roles that can edit invoices make claims; setting up a job’s claims needs an owner, or a role that can edit quotes, invoices and payments.

Set up claims

1. 1.Open the job and click Set up claims in its Claims section.
2. 2.Claim by: By stage (each stage is claimed whole) or By percent complete (each part is claimed by how much of it is done).
3. 3.Start from: Builder (Deposit 5%, Base 15%, Frame 20%, Lock-up 20%, Fixing 20%, Practical completion 20%) or Made in the workshop (Deposit 10%, Manufacture complete 50%, Installed 40%). Rename, add or remove stages as you like. Each stage is a share of the contract and the shares add up to 100%; its value is shown beside it.
4. 4.Tick Deposit on the deposit stage, and add the date you expect to claim each stage if you want a reminder.
5. 5.If a stage was already billed on an invoice before claims began, such as a deposit invoice, choose that invoice under Already billed on an invoice, so it is never billed twice.
6. 6.Choose the Contract type and, when more than half the contract price is work made off site, such as stairs made in your workshop, tick More than half the contract price is off-site work.
7. 7.Save. You can change the schedule later with Edit schedule, apart from a stage that has been claimed.

The contract a claim is made against

The contract is the job’s value ex GST, or, once Variations is on and a variation is approved, the job’s original contract with the approved variations added. The stages share the original contract. Each approved variation is claimed on top, once: the next claim takes it when the variation is paid with the next invoice or claim, and one paid when its work starts is offered unticked.

For a job brought across from ServiceM8 with billing records, the contract is the whole family’s, and every invoice already raised on the job or its billing records counts as claimed before, so a deposit is never taken twice.

Make a claim

The claim is saved as a draft invoice with one line, such as Claim 3: Lock-up (less 5% retention), and the full claim table. Send it as you send any invoice. A claim’s lines and amounts stay as they were made: to change one, cancel it, or delete a draft, and make it again.

1. 1.Click Make claim. The invoice builder opens as a Progress claim.
2. 2.By stage: tick the stages this claim is for. The next stage not yet claimed starts ticked. By percent complete: enter how far each part is now done, for example 60%. A claim never takes back what an earlier claim billed.
3. 3.Check the approved variations it includes, the warnings, if any, and the claim table: the contract, claimed before this claim, this claim, claimed to date, remaining to claim, the retention held and the amount of this claim.
4. 4.Set the due date (it starts from the payment terms) and add notes, then click Create draft claim.

Draft for your review

Before you send a claim, the customer can agree the figures first. On a draft claim in the Claims section, click Draft for your review for a PDF titled Progress claim: draft for your review. It shows the claim table and says it is not a payment claim and does not ask for payment. Once the figures are agreed, send the claim itself.

Retention

Tick Hold retention when you set up claims. Held from each claim is the share kept back from each claim, and Most held is the most kept back, as a share of the contract (blank for no limit). Tick include variations to hold retention on approved variations too; once on, it stays on. Add up to two releases, for example half at practical completion and half at the end of the defects period, each with its share and the date you expect it.

Each claim shows the retention held from it and the retention held to date. When a release is due, click Release retention.

GST on retention

Settings, then Invoicing & Numbering, then Progress claims, chooses how GST is charged on retention for a new schedule. A job keeps the choice it was set up with once retention has been held. Your accountant can tell you which suits your business.

1. 1.GST when the retention is invoiced (the default): each claim charges GST on the amount it bills now. Release retention makes a retention invoice for that release’s share of the retention held, with its GST.
2. 2.GST on the full claim: when a claim is issued, VexOp+ also makes a retention invoice for the retention held from it, one for each release, so its GST is charged with the claim. Each one is payable when its release is due. Release retention gives that release’s retention invoices a due date from the payment terms, ready to send.

Queensland checks

VexOp+ checks a few Queensland rules as you make a claim and shows a warning. A warning never stops you. When you are not sure, check with the QBCC or your own adviser.

1. 1.Residential building work, for an owner who will live there or for an investor or a company: a warning when the deposit is more than the most a deposit can be for a contract of that size, on the contract price with GST (5% from $20,000, 10% above $3,300 and under $20,000, and up to 20% when more than half the contract price is off-site work), and when a stage is claimed before it is marked done. Mark a stage done in the Claims section with Mark done. The deposit stage is never asked to be done first.
2. 2.Business to business (you claim from a builder or another business), and residential work for an investor or a company: each claim says it is a payment claim under the Building Industry Fairness (Security of Payment) Act 2017 (Qld), and that a payment schedule is due within 15 business days after it is received, or sooner if your contract says so. Set the contract’s time when you set up claims. Once a claim has been given, the claim shows you the date VexOp+ counts.
3. 3.Business days leave out weekends, Queensland public holidays and 22 December to 10 January. Local show holidays are not counted.

Payment schedules

When a builder replies to a business-to-business claim with a payment schedule, click Record payment schedule on that claim: the date it arrived, the amount it says will be paid including GST, and a note. Owners and anyone who can see invoices are told in the bell two business days before a payment schedule is due, and again if the day passes with none recorded.

Reminders in the bell

The bell says Claim due when a stage is marked done or the date you expected to claim it arrives, and Retention release due when a release’s expected date arrives while retention is still held. Each is said once. They go to owners and anyone whose role can see invoices.

Final invoices and your accounting system

A claim goes to Xero, MYOB or QuickBooks as an ordinary invoice with one line, so the totals there match VexOp+ to the cent. A retention invoice goes the same way.

If you raise a Full invoice on a job with claims, each claim is taken off it as Less claim and its number, as a deposit invoice is.

The Claims and retentions report

Reports, then Claims and retentions, lists every claim and retention invoice per job, and Retentions owed to you shows per job the retention held, released and still held, with the next release and its expected date. Show All, Not paid yet, Paid or Drafts, and click Export CSV, or Export retentions for the retentions. It needs access to Reports.

If Progress claims is switched off

Every schedule and claim is kept, but the Claims section, the report, the settings page and the reminders are hidden. Claims already made stay ordinary invoices: you can still send them and record their payments. Switch Progress claims back on and it all comes back. See the article on switching add-ons on and off.

Claims are set up and made in the web app. VexOp Field does not show them.