Progress claims are an essential part of the construction process. They allow builders and contractors to get paid for the work they have completed, while also providing clients with a way to track the progress of their project. On this page, you’ll discover reliable information on how to prepare and submit valid progress claims, manage disputes, and get paid on time and in full.
A progress claim (or in other words, progress payment) is a document submitted by a builder to their client requesting payment for work that has been completed to date, based on an agreed-upon payment schedule.
The timing and frequency of progress claims in construction are regulated by the construction contract among the affected parties. Therefore, progress claims may be made as one-off payments, at regular intervals (monthly or quarterly), or after specific project stages are completed.
Progress claims serve several important functions in the construction industry:
Therefore, progress payments contribute to greater transparency, time and resource management, and promote fairness in construction projects.
Progress claims and invoices are both utilised to request payments among business parties in the construction industry.
Progress claims are periodic requests for payment for work that has been completed, based on a percentage of the total work.
Invoices, on the other hand, are typically used to request payment for services that have been delivered and include the total service costs.
This is especially common when the project is divided into stages, and the contractor completes each stage in a timely manner. In such cases, the client may simply approve the progress claim and send the payment to the contractor, without requiring a separate invoice.
The payment schedule is a document that outlines the terms and conditions related to progress claims. It typically includes the following information:
The payment schedule is generally included in the construction contract between the parties involved in the project.
To match with the regulatory standards, a progress claim template can include items such as:
The specific documentation in a progress claim can vary depending on the construction contract in question. However, some common documents that are a part of in a progress claim are:
To prepare and submit a valid progress claim, you can follow these steps:
A progress claim response is a document that typically states whether the client has approved the claim or not. It specifies the approved payment amount and may include comments from the client regarding the claim.
Ignoring a progress claim is not advisable. When clients receive a claim, they can respond in several ways: they can pay the full amount stated in the claim, provide a payment schedule, or pay according to the specified schedule by the due date.
If the claim is denied, clients must provide a clear and detailed explanation for their decision. Alternatively, contractors can seek legal assistance to identify potential errors in the quality of work or if their rights have been violated. In extreme cases, contractors can halt all work on the site.
Disputes over project claims can occur frequently due to various reasons. When disputes arise, it is crucial to manage them effectively and promptly to prevent project delays and escalations that may lead to litigation and court proceedings. Here are some tips on how to manage disputes over progress claims:
Australian construction laws and regulations offer a functional framework for progress claims within the industry. The Security of Payment Act, Fair Work Act, and Australian Consumer Law include provisions safeguarding contractors, employees, and consumers from unfair practices.
Construction businesses can foster good business practices by comprehending their rights and responsibilities. Regular submission of progress claims and timely responses improve cooperation. In case of disputes, seeking legal assistance and mediation can lead to a quick and efficient resolution.
As professionals skilled in assessing and projecting construction costs, registered quantity surveyors offer valuable support to contractors in preparing progress claims. They assist in defining schedules of values, tracking project costs, preparing well-documented progress claims, and providing expert advice on costs and pricing. If you require assistance with your progress claims, please do not hesitate to reach out. With over 20 years of experience in the industry, Property and Building Assessments is here to help you.