Subcontractors
Measure and issue a subcontractor certificate
Measure the subcontractor's work to date, deduct retention, advance recovery, penalties, back-charges and withholding tax, then approve and issue it to add what you owe to the subcontractor's account.
2 min readLast updated
In this article
A subcontractor certificate pays the subcontractor for the work measured to date, less what earlier certificates paid for. It is worked out the same way as a client certificate, then reduced by back-charges and withholding tax.
Start a certificate
Open the subcontract and its Certificates tab, then select New certificate.
Enter the end of the period and, if you have it, the subcontractor's invoice number, then select Start.
The certificate starts from what the last issued certificate paid for. Only one certificate can be in progress at a time.
Measure the work
For each item, enter the quantity done to date. The figures update as you type; a quantity beyond the bill of quantities is marked and must be corrected.
Under back-charges, select Add back-charge for each cost you bore for the subcontractor: materials from your store, water and power, repairs. Each can carry a task.
Enter any Penalties and their reason.
Select Save.
How the figures are built
Work this period, less penalties, less retention (up to its cap), less advance recovery: the net.
Plus VAT: what the subcontractor bills.
Less back-charges and less withholding tax: what is payable. Back-charges do not change the VAT.
Approve and issue
The preparer submits it for approval. Someone else with permission to approve subcontractor certificates approves it, or returns it to draft; then issues it.
Issuing posts the subcontract cost to the project, task by task, and credits retention payable, the advance paid, each back-charge's account, withholding tax payable and the subcontractor. What is payable is added to the subcontractor's supplier account, so it shows on its statement and in aged payables.
Common questions
Where do back-charges go? To the project's material cost account unless another account is chosen, with the task you set. The cost the project bore is reduced by what the subcontractor pays back.
Can I approve my own certificate? No. The person who prepares a certificate cannot approve it.