Payment Application Business Rules & Calculations

1. Payment Applications are specific to the contract selected when creating the Payment Application
2. Paid Payment Application - Once a payment application is paid, it is locked and can no longer be edited
3. Delete Payment Application - A Payment Application can only be deleted if; 
   1. The Payment Application has not been shared
   2. The Payment Application is the last Payment Application is sequence for that contract 
   3. You created the Payment Application
4. First Payment Application - When the first payment application is created, the Schedule of Values from the associated contract are carried over into the Payment Application - Item Breakdown.
5. Item Breakdown calculations
1. Description - Carried over from the Contract -Schedule of Values
2. Value  - Carried over from the Contract -Schedule of Values
3. Budget Code - Carried over from the Contract -Schedule of Values
4. Work Completed from Previous Applications - (Work Completed from Previous Applications) plus (Work Completed This Period from the most recent Payment Application)
5. Work Completed This Period - (Total Completed and Stored) minus (Materials Presently Stored) minus (Work Complete from Previous Applications)
6. Materials Presently Stored - The monetary value of materials presently store on site for that item
7. Total Completed and Stored to Date - Total amount of Work Completed and Presently Stored Material up to and including this Payment Application
8. % Complete - (Total Completed and Stored to Date) / (Value)
9. Balance to Finish - (Value) minus (Total Completed and Stored to Date)
10. Retainage - (("Work Completed From Previous Application" +"Work Completed This Period") multiplied by "Retainage of Completed Work") + ("Materials Presently Stored" multipled by "Retainage of Stored Material") = "Retainage"
1. Validation Check -  The "Retainage" summary plus the "Balance to Finish" summary should equal the "Balance Remaining, Including Retainage" field on the Financial Summary tab
2. Calculation is based on the Retainage % entered on the Financial Summary tab for the Retainage of Completed Work (%) & Retainage of Stored Material (%)
   
6. Financial Summary calculations
   1. Original Contract Amount - Read only information carried over from the contract
   2. Change Orders - Read only information carried over from the contract - Approved Change Orders amount
   3. Revised Contract Value - Read only information carried over from the contract. Original Contract Value plus Approved Change Orders
   4. Total Completed and Stored - Read only information - Summary of Item Breakdown - Total Completed and Stored to Date
   5. % Retainage of Completed Work - Manually entered value. Used to calculate the Retainage values on the Item Breakdown
   6. $ Retainage of Completed Work - Work Completed times Retainage of Completed Work (%)
   7. % Retainage of Stored Material - Manually entered value. Used to calculate the Retainage values on the Item Breakdown
   8. $ Retainage of Stored Material - Materials Presently Stored times Retainage of Stored Material (%)
   9. Total Retainage Amount - Retainage of Completed Work plus Retainage of Stored Material
   10. Total Earnings Less Retainage (Read only: "Total Complete and Store" minus "Total Retainage Amount")
   11. Less Previous Invoices (Read Only: "Total Earnings Less Retainage" from previous according to sequence #)
   12. Current Payment Due (Read only: "Total Earnings Less Retainage" minus "Less Previous Invoices")
   13. Balance Remaining, Including Retainage (Read only: "Revised Contract Amount" minus "Total Earnings Less Retainage")
7. open

Creating a Payment Application

To create a Payment Application:

1. Once logged into the project, c 'Add New'.
1. Note that forms displayed on the secondary navigation bar are configurable. If you do not see CONTRACTS - PAYMENT APPLICATIONS , select 'More' - 'Configure My Menu'. Add the Contracts form to your secondary navigation bar. See the screen shot below. PAYMENT APPLICATIONS is part of the CONTRACTS menu and should be displayed once the Contracts form has been added to your secondary navigation bar.
2. Upon selecting 'Add New', a 'Choose Contract' modal will be displayed. Select the contract to which this payment application will be applied, and then click the 'Choose Contract' button. The selected contract will be displayed as a read-only reference in the 'Contract Reference' field in the 'Create New Payment Application' form.
3. Subject - Enter the Subject. This is a required field.
4. Contract Date - Contract Date is a read-only reference pulled from the selected contract.
5. Application Number - The system will automatically generate the application number based on existing payment applications for the selected contract and will be composed of 4 characters (e.g. Contract 0001 - Payment Application 0001, 0002 - Contract 0002 - Payment Application  0001, 0002). While the system does auto-generate the application number, this field is editable.
6. Application Date - Enter the date of the payment application.
7. Cost Period - The cost period is used to define the billing period for which the payment application is being submitted. Cost periods are setup for each project under Project Administration - Cost Periods. See the screen shot below. For more information on setting up cost periods, please reference the Help section Cost Periods Cost Period is a required field and must contain an entry. 
8. Proceed to complete other information as relevant to the payment application and click 'Save' when finished.
   1. Paid Date - When the payment has been received, edit the payment application and enter the 'Paid Date'. Save the payment application.
   2. PAID - On the bottom of the Payment Application form, note the option to check the 'Paid' box. See the section below on Marking a Payment Application as 'Paid'.
9.  Financial Summary -  The Financial Summary tab is primarily used for viewing a summary of information on payment applications up to and including that payment application. There are however, two fields that can be edited on the Financial Summary tab. Enter the percentage of retainage percentage to be held on the payment application for: 
   1. Retainage of Completed Work (%):
   2. Retainage of Stored Material (%):
10. Item Breakdown - The Item Breakdown tab is used to bill each Schedule of Value line item as necessary for that payment application. When you create your first payment application, the Schedule of Values on the contract are carried over into the payment application.
1. First Payment Application
1. Value - Carried over from Contract - Schedule of Values. This value is editable by selecting 'Edit' from the 'Action' drop down.
2. % Complete - Starts at $0. The percentage of completion is calculated when the 'Total Completed and Stored to Date' amount is entered. This amount is divided by the 'Value' to equal the % Complete.
3. Balance to Finish = The balance to finish amount is calculated by subtracting the 'Total Completed and Stored to Date' from the line item 'Value'.
4. Retainage = Starts at $0. See the Help section on this page under 'Payment Applications Business Rules & Calculations'.
5. Work Completed from Previous Applications = $0 (No previous payment applications exist)
6. Materials Presently Stored - From the 'Action' drop down, select 'Edit' . In the Materials Presently Stored field, enter the total value of materials that are on site for this item.
7. Total Completed and Stored to Date - From the 'Action' drop down, select 'Edit' . In the Total Completed and Stored to Date field, enter the total value for all work completed and materials used up to and including this payment application. In the process of entering a value for Total Completed and Stored to Date, Materials Presently Stored should be adjusted to accommodate for the materials used for this payment application and any additional materials that have been delivered on site for this line item. Simplified, The Materials Presently Stored should equal the value of materials on site for the billed line item at the time of submitting this payment application.
8. Work Completed This Period - This field is a calculate field (Total Completed and Stored to Date) - (Materials Presently Stored) = Work Completed This Period 
11. With all information completed on the General, Financial Summary, and Item Breakdown tabs, save the Payment Application.

Marking a Payment Application as 'Paid'

When payment has been received, the Payment Application form provides an option to mark that payment application as paid. To mark a payment application as paid, navigate to CONTRACTS - PAYMENT APPLICATIONS and select 'Edit' next to the desired payment application to be paid. On the bottom of the form, check the 'Paid'. You will be prompted with the message "Are you sure you want to mark this Payment Application as "Paid"? Once paid, users will no longer be able to make edit this Form". You can click No Never mind, and the payment application will still be editable. Select 'Yes' to confirm that you wish to mark the payment application as paid. Click 'Save' to save the payment application.

Creating Subsequent Payment Applications

Creating subsequent payment applications is similar to the instructions on creating payment applications with the following differences

1. Subsequent payment applications follow a sequence based on the contract selected for that series of payment applications. The 'Sequence' field on the payment application is incremented accordingly.
2. Create Next in Sequence - An option is provided on existing payment applications that allow the next payment application to be created directly from the existing payment application. To use this option, click 'Create Next in Sequence' on an existing payment application. Optionally, the 'Create New' button can be used from the Payment Applications log.
3. Subsequent payment applications will carry over the following values from the previous payment application - Item Breakdown:
   1. General - The Contract Reference and Contract Date are automatically carried over from the previous payment application.
   2. Financial Summary - Retainage of Completed Work (%) & Retainage of Stored Material (%). These percentages are editable and can be changed on each payment application.
   3. Item Breakdown:
      1. Materials Presently Stored - The materials presently stored amount is carried over from the previous payment application as a reference or starting point. This amount is editable based on the amount of materials that are presently stored at the time of submitting the subsequent payment application.
      2. Total Completed and Stored to Date - The total completed and stored to date amount is carried over from the previous payment application as a reference or starting point. This amount is editable based on the amount of total work completed and materials stored at the time of submitting the subsequent payment application.
      3. Work Completed from Previous Applications - This value is carried over from all previous applications including the Work Completed This Period from the most recent payment application.
   4. Work Completed This Period - This value is set to $0 and is calculated with each payment application by the values entered in Materials Presently Stored & Total Completed and Stored to Date. (Total Completed and Stored to Date) - (Materials Presently Stored)  -  (Work Completed from Previous Applications) = "Work Completed This Period"
4. To complete the payment application process, click 'Save' to save the new payment application.
   1. REMINDER: Once a Payment Application is marked as PAID and saved, it can no longer be edited. 

Adding/Removing Line Items on a Payment Application

Payment Applications begin with Item Breakdown line items which are carried over from the Contract Schedule of Values upon creating the first payment application. It may be necessary however to add line items to the Item Breakdown collection. This can be accomplished by clicking the 'Add Item Breakdown' button on the Item Breakdown tab. When doing so, the line item will be added to the end of the Item Breakdown collection. Alternately, if a row needs to be inserted into a specific location of the Item Breakdown collection, select 'New Item' from the 'Action' drop down. Inserting a row in the Item Breakdown collection will insert that row above the line selected.

• Add New Item Breakdown
• Enter the following information and click 'Add Item Breakdown' or if multiple line items need to be entered, click 'Add and New'.
• Description
• Value
• Budget Code
• Materials Presently Stored
• Total Completed and Stored to Date 
• Inserting Schedule of Values into the Item Breakdown collection - Schedule of Values can be inserted into your desired location within the Item Breakdown - Schedule of Values. To do this, click the 'Action' drop down choosing 'New Item' . Enter the Description and appropriate values and click the 'Add Item Breakdown' button. The line item will be inserted above the line selected.
• Removing line items from the Item Breakdown collection - To remove a line time,  select 'Remove' from the 'Action' drop down. The following notes of caution are advised:
  • • Once a line item is removed from the Item Breakdown collection and the payment application is saved, that line item cannot be recovered by means other than re-entry via 'Add Item Breakdown'.
    • Line items removed from payment applications that are not the last payment application in sequence also removes those line items from all subsequent payment applications if those subsequent payment applications are not marked as PAID.
      • Example:
        • Payment Applications 0001, 0002, 0003, & 0004 exist, each with 3 line items in the Item Breakdown collection.
        • Each Payment Application has been billed (Amounts entered in Materials Presently Stored & Total Completed and Stored to Date).
        • Payment Application 0003 has been submitted but not yet paid (Not marked as PAID)
        • Payment Application 0004 has been created and saved, but not yet submitted.
        • Payment Application 0001 has been submitted and payment has been received. Payment Application 0001 has been marked as PAID and is locked (Read Only).
        • Payment Application 0002 has been created and is not marked as PAID. Payment Application 0002 is edited and saved removing line item #2 from the Item Breakdown.
          • Payment Application 0001 is not affected. Item removal form the Item Breakdown does not affect previous payment applications.
          • Payment Applications 0003 & 0004 are updated by the removal of item #2 also removing this row from those payment applications. In the event payment application 0003 had been locked (PAID) neither payment application 0003 or 0004 would be affected by the change to payment application 0002 item removal. Editing payment applications by removal of line items only affects payment applications forward up to the payment application that is locked (PAID).

Adding Change Orders to a Payment Application

Contracts often call for changes to the contract. Those contract changes are typically processed in the form of a Change Order. Once a change order has been processed, that change order can be linked to a Payment Application to be billed as a line item in the Item Breakdown collection. To link a change order to a payment application, use one of the following two methods:

1. Adds the Change Order to the bottom of the Item Breakdown collection - Edit the Payment Application and on the Item Breakdown tab, click the 'Add Change Order' button. Change orders created for the same contract to which the payment application are create are listed in the 'Add Change Order' modal. Select the change order(s) to be added to the payment application and click the Add Change Order' button. The change order should be listed in the Item Breakdown collection. Save the payment application. This line item for the change order can be billed in the same manner as other line items in the Item Breakdown collection. Alternately, if a change order needs to be inserted into a specific location of the Item Breakdown collection, select 'Change Order' from the 'Action' drop down. Inserting a change order in the Item Breakdown collection will insert that change order as a row above the line selected.
2. Inserts the Change Order to your desired location of the Item Breakdown collection - Select the line item below the desired location in the Item Breakdown collection. In the 'Action' column click the drop down selecting 'Change Order'. Select the Change Order to be inserted and click the 'Add Change Order' button.

Editing Payment Applications

To edit a Payment Application, navigate to CONTRACTS - PAYMENT APPLICATIONS and select 'Edit' next to the desired payment application to be edited. When you are finished making edits, click 'Save'. Payment applications that have been edited and marked as PAID, can only be viewed. The following information pertains to payment applications editable data:

• General Information
  • The Contract Reference, Contract Date, and Sequence fields are non-editable fields. Other fields on the general tab can be edited. The Subject and Cost Period fields are editable but cannot be blank as these fields are required. The Paid field is editable, however once selected and the payment application saved, no fields on the payment application will be editable.  
• Financial Summary
  • The Retainage of Completed Work (%) & Retainage of Stored Material (%) fields are editable. Changing the percentage in these fields affects the 'Retainage' values on the Item Breakdown of the existing payment application only. It does not affect the retainage percentage or retainage values on subsequent payment applications that have already been created.   
• Item Breakdown
• Editing line items on the Item Breakdown tab by choosing 'Edit' from the Action dropdown. The following fields can also be edited in line:
  • Description
  • Value
  • Budget Code
  • Materials Presently Stored
  • Total Completed and Stored to Date 
• The following information describes the cause and effect of editing the Item Breakdown collection of an existing payment application
• Payment Applications marked as PAID
  • Not affected by changes made to preceding or subsequent payment applications 
• Adding Item Breakdown items including change orders
• Adds the line item or change order to that payment application and all subsequent payment applications up to a PAID payment application. 
• Removing Item Breakdown items including change orders
  • Removes the line item or change order for that payment application and all subsequent payment applications up to a PAID payment application.
• Description
  • Updates the description for that line item on that payment application and all subsequent payment applications up to a PAID payment application.  
• % Complete Calculation - The % Complete calculation uses a 'round-up' model to enter the % Complete value (e.g. 9.6% is rounded up to 10%).
• Value
  • Updates the value for that line item on that payment application and all subsequent payment applications up to a PAID payment application
  • Updates the % Complete for that line item on that payment application and all subsequent payment applications up to a PAID payment application
  • Updates the Balance to Finish for that line item on that payment application and all subsequent payment applications up to a PAID payment application
• Materials Presently Stored
  • Previous Payment Applications - No affect.
  • Current Payment Application - Updates the 'Work Completed This Period' field. (Total Completed and Stored to Date) - (Materials Presently Stored) = (Work Completed This Period). Changing the Materials Presently Stored will update the Work Completed This Period.
  • Subsequent Payment Applications - Because the Materials Presently Stored is a variable used to calculate the Work Completed This Period in that Payment Application, the Work Completed from Previous Applications in subsequent Payment Applications is also affected by the change to Materials Presently Stored in the previous Payment Application. The affects of a change to the Materials Presently Stored carry forward to the next Payment Application in sequence. 
    • Work Completed from Previous Applications - Because changing the value of Materials Presently Stored in previous Payment Applications changes the Work Completed This Period in that Payment Application, subsequent Payment Applications - Work Completed from Previous Applications is also updated.
    • Work Completed this Period - Because Work Completed this Period is a calculation based on  (Total Completed and Stored) minus (Materials Presently Stored) minus (Work Complete from Previous Applications), changes to the Materials Presently Stored in the previous Payment Application does affect the Work Completed this Period in the subsequent Payment Application by that amount changed.
• Total Completed and Stored to Date -
• Previous Payment Applications - No affect
• Current Payment Application
  • Work Completed this Period - Updates the value in the Work Completed this Period by the amount changed in Total Completed and Stored to Date
  • % Complete - Adjusts the % Complete
  • Balance to Finish -  Adjusts the Balance to Finish by the amount changed in the Total Completed and Stored to Date
  • Retainage - Adjusts the Retainage amount.
• Subsequent Payment Application -  (Next in sequence)
• Work Completed this Period - Adjusts the Work Completed this Period by the amount changed in the Total Completed and Stored to Date in the previous Payment Application
• Work Completed from Previous Applications - Adjusts the amount by the amount changed in the Total Completed and Stored to Date on the previous Payment Application.

Viewing a Payment Application

Payment Applications can be viewed if they have been shared to you. For information on sharing, please see the Help section What is Sharing? . To view  a Payment Application, select 'PAYMENT APPLICATIONS' from the CONTRACTS form on the secondary navigation menu. From the Payment Application log, select the Payment Application you wish to view.

Sharing a Payment Application

To share a Payment Application to other project users, click the  'Share' button on the Payment Application in form view. Use the Share modal to share the Payment Application to other project team users. For information on sharing, please see the Help section What is Sharing? 

Helpful Screenshots