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Create a Subcontractor Payment application for Release of Retention

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Objective

To create a subcontractor payment application for the release of retention as a final payment.

Background

In Procore, the term Retention refers to the practice of withholding of a portion of a contract amount until the work is deemed satisfactorily complete. The withheld amount is specified in an agreement between the contracting party (the party paying for the work) and a contracted party (the person or company performing the work).  A common practice is to withhold 5-10% of a contract's total value until a milestone is reached. Then, the withheld amount can be released as a progress payment. When work is substantially complete, the withheld amount can be released as a final payment. 

Things to Consider

 Notes
  • Access permissions to the Payment applications & Progress Billings tools are governed by the permissions set on the Commitments and/or Client Contracts, Funding or Main Contracts tool. Procore tool names vary, depending on the language or point-of-view dictionary configured in Procore. See What dictionaries and languages are available in the Procore web application?
  • If you are a collaborator (for example, an payment application contact employed by a company performing work on a project managed in Procore, your ability to perform invoice-related tasks is determined by the Procore company account holder. Settings that the account holder may choose to provide to you include:
    • A Procore User account.
    • Access permissions to the project's Commitments and/or Client Contracts, Funding or Main Contracts tool.
    • Membership on the 'Private' list of a specific contract or funding
    • Designated as an 'Invoice Contact' on the contract or funding.
  • Required User Permissions:
    • To set and release retention when editing a payment application before, during or after the current billing period, 'Admin' level permissions on the project's Commitments tool.
      OR
    • To release retention when editing a payment application during the current billing period only, 'Standard' level permissions on the project's Commitments tool and you must be the designated 'Invoice Contact' on the contract. Payment application contacts are automatically added to the 'Private' drop-down list on the contract. If you have these permissions, see these tutorials: Send an 'Invite to Bill' to a Payment Application Contact and Submit a New Payment application as a Payment Application Contact. 
      OR
    • To release retention when editing a payment application during the current billing period only, 'Standard' level permissions on the project's Commitments tool and you must be added to the 'Private' drop-down list on the contract.
      OR
    • Read about the alternative permissions options: Show/Hide  
      • Some Procore customers choose to grant external users access permissions to the project's Commitments tool to allow them to create payment applications. The following options is available, but NOT recommended: 
        • 'Read Only' level permission on the project's Commitments tool and designated as an 'Invoice Contact' ​​​​​​on the purchase order or subcontract. If users are granted these permissions, they have permission to modify the retention amount to release on a payment application before a billing period's 'Due Date'. 
  • Additional Information:
    • You can create payment applications for purchase orders and subcontracts.  
    • If you are the payment application contact for the 'Contract Company' on a purchase order or subcontract, you have these options for submitting a payment application:
    • If there are multiple payment applications for a single billing period, you can only edit the billed amounts on the most recently created payment application.
    • If the contractor will create a payment programme once the payment application is approved, enter the amounts for the work you are claiming this period in the 'Proposed Amount' column of the payment application detail. In order for this column to appear, the payment programme feature must be enabled in the Payment applications tool’s configuration settings. See Configure Settings: Payment applications.

Steps

  1. Navigate to the project's Payment applications tool. 
  2. Click the Subcontractor tab.
  3. Locate the subcontractor payment application to update in the table. Then click its Payment application # link to open it.
    This opens the payment application in the project's Commitments tool. 
     Notes
    • When navigating to a payment application from the Payment applications tool, your user account must be granted the required user permissions detailed above in order to view and gain access to the payment application.
  4. In the payment application, click the General tab. The General tab is active by default when you open a payment application.  
  5. Scroll down to Bill of Quantities. 

  6. If you want to set and release retention on the line items in the BOQ, follow these steps:

    1. Choose from these options to select the line items:
      • To select all of the line items in the BOQ, click the tickbox in the 'Item Number' header of the data table. 
        OR
      • To select individual line items, mark the tickbox(es) in the 'Item Number' column for the desired line item(s). 
    2. In the Bill of Quantities, click the Edit button. 
    3. Optional: If you are a payment application administrator who wants to set the retention for the payment application, do the following: 
      • Mark one or more Item Number tickboxes. Then click the pencil icon above the data table in the Bill of Quantities. 
        This opens the Edit pane on the right side of the page. 
      • Enter the retention values to apply to the selected line item(s):
        • Work Retention This Period (%). Enter a percentage amount to indicate the percentage of work retention to be released this billing period. 
        • Retention Released. Enter a percentage amount to indicate the percentage of retention released.
        • Materials Retention (%). Enter a percentage amount to indicate the percentage of work retention to be released this billing period. 
      • Click Apply. 
    4. Choose from these options for entering work retention:
      • Work Retention This Period (£). Shows the currency amount for the work retention this period. The value that appears here is based on your entry in the 'Work Completed this Period' column. An entry in this cell lets Procore automatically calculate the percentage value in the 'Work Retention This Period (%)' column. 
        OR
      • Work Retention This Period (%). Enter a percentage amount for the work retention that you are requesting to be released this period. An entry in this cell lets Procore automatically calculate the currency value in the 'Work Retention This Period (£)' column. 
    5. In the Total Retention Released column, enter the total amount of work retention being requested for release on the line item. 
    6. Choose from these options for entering materials retention: 
      • Materials Retention (£). Enter a currency amount for the material retention that you are requesting to be released this period. The value that appears here is based on your entries in the New Materials Stored and Previous Materials Stored columns. An entry in this cell lets Procore automatically calculate the percentage value in the 'Materials Retention This Period (%)' column. 
        OR
      • Materials Retention (%). Enter a percentage amount for the material retention that you are requesting to be released this period. The value that appears here is based on your entries in the New Materials Stored and Previous Materials Stored columns. An entry in this cell lets Procore automatically calculate the percentage value in the 'Materials Retention This Period (%)' column. 
    7. In the Total Retention column, Procore calculates the sum of the 'Work Retention This Period (£)' amount plus the 'Materials Retention (£)' amount to represent the total retention amount on the payment application. 
  7. Optional: If the contractor will create a payment programme once the payment application is approved, enter the amounts for the work you are claiming this period in the 'Proposed Amount' column.
    Note: In order for the 'Proposed Amount' column to appear, the payment programme feature must be enabled in the Payment applications tool’s configuration settings. See Configure Settings: Payment applications.
  8. Click Save.
  9. Optional. If the payment application administrator requires you to include a signed copy of the PDF, complete the following steps:
    1. Choose Export > PDF.
    2. Sign the PDF.
       Tip

      How do you add a signature to a PDF? Depending on your specific business requirements, there are different options you can evaluate to determine the best option for you:

      • Wet Signature. You can print out the exported PDF file and add a physical signature. Then use a scanner or camera to capture the signed document and add it to your payment application an attachment. 
      • Electronic Signature. You can add a digital or electronic signature to the payment application. There are a variety of third-party software vendors, such as DocuSign© and Adobe® Acrobat™, that provide signature capabilities for PDF files. After you sign the document, add it to your payment application as an attachment. 
  10. Click the Summary tab.
  11. Click Edit.
  12. In the Attachments section, upload any required backup documentation, such as lien waivers and the signed export PDF.
  13. Choose from the following options:
    • If you are ready to submit the payment application to the contractor, click Submit for Review. This changes the payment application status to Under Review. 
    • If you are NOT ready to submit the payment application, click Save. This sets the payment application status to Draft.
      Note: Once you submit the payment application to the contractor, you will no longer be able to edit it unless the contractor changes the status Revise & Resubmit.