Progress billing disputes are the single biggest cause of contractor relationship breakdowns on UAE construction projects.
Start here
Your progress billing process depends on these foundations:
- Construction ERP with contract and variation tracking
- Approval matrix for payment certificate sign-off
- Construction accounting for cost-to-complete visibility
- Audit logs to record every valuation change
How progress billing works
The contractor submits a monthly valuation (IPC — Interim Payment Certificate) claiming the percentage of work completed against each BOQ line item. The consultant reviews, adjusts, and certifies. The developer then processes payment after deducting retention, advances, and any back-charges.
Each step produces a document that must be stored and linked to the contract.
Common mistakes in UAE projects
- Accepting contractor valuations without site measurement verification
- Not tracking cumulative claimed amounts against the contract value
- Applying retention inconsistently (should be a fixed percentage, typically 5-10%)
- Forgetting to deduct advance payment recovery from each IPC
- Missing the contractual payment timeline, triggering late-payment claims
Payment certificate workflow
Design your workflow with these gates:
- Contractor submits valuation with supporting measurements
- Quantity surveyor verifies against site progress and adjusts line items
- Consultant certifies the adjusted amount
- Project manager reviews and routes for internal approval
- Finance processes payment after deductions (retention, advances, back-charges)
- Payment confirmation is recorded against the contract ledger
Retention tracking
Retention is your insurance against defects. Track it separately:
- Deduct the agreed percentage from every IPC
- Maintain a retention ledger per contract
- Release 50% at practical completion, 50% at defects liability period end
- Require a formal release request with sign-off before paying retention
Never release retention without a documented inspection report.
Tie billing to your cost reports
Every certified IPC should feed into your construction cost management reports. Compare certified amounts against budget at the line-item level. If cumulative certified amounts exceed the original contract value plus approved variations, flag it immediately.
Checklist per payment certificate
- Valuation matches verified site measurements
- Cumulative claimed amount does not exceed contract plus approved variations
- Retention deducted at the correct percentage
- Advance recovery applied per the agreed schedule
- All supporting documents attached and version-controlled
- Approval chain completed before payment instruction