The interim payment application, often called an IPC, is the document that turns work on site into cash. Contractors who build it carefully get certified faster and argue less. Contract terms vary, so the examples below are illustrations; always follow your own contract. See also the contractor software guide and the system view in UAE Construction ERP.
The calculation, cumulatively
Each application values everything done to date, then subtracts what was already certified. This avoids errors from adding months together.
| Line | Example |
|---|---|
| Value of work done to date (BOQ quantity times rate) | 1,000,000 |
| Approved variations to date | +50,000 |
| Materials on site, if allowed | +30,000 |
| Gross value to date | 1,080,000 |
| Retention at 10 percent (to the contract cap) | -108,000 |
| Advance recovery to date | -100,000 |
| Net value to date | 872,000 |
| Previously certified net | -700,000 |
| Net payable this period (before VAT) | 172,000 |
Retention and its release
Retention is usually a percentage held until completion or the end of the defects period, often capped at a share of the contract sum. A release should never exceed what is actually held, and release is normally invoiced separately when the contract conditions are met.
Advance and variations
- The advance payment is normally invoiced against a guarantee and recovered through deductions over the following applications.
- A variation should be in the application only if it is instructed or agreed; keep the instruction reference and the time impact.
Workflow
- Site team records measured quantities.
- The quantity surveyor prepares the application; a second person approves.
- The client's engineer certifies and may change quantities.
- The tax invoice is issued for the certified net with VAT.
- Subcontractor certificates for the same period are prepared on the same measurements.
Dispute risk falls when each quantity has a measurement sheet and a date. Talk to us about the commercial tools for your projects.