Progress Payments: Questions to Resolve Before Paying
Payment rights and obligations depend on the jurisdiction, parties, work, value calculation, contract, claim, evidence, notices, and current law. This article does not recommend a deposit, milestone percentage, retention, or payment schedule.
What is a progress claim?
A progress claim is a request for payment under a contract or applicable payment regime. It may refer to work performed, materials, a milestone, time, or another agreed basis. The label alone does not establish that the claim is valid, due, correctly valued, or supported.
Before paying, reconcile the claimant, contract, approved variations, scope, tax invoice, period, amount, evidence, previous payments, credits, retention or security, and bank details. Obtain legal, accounting, lender, and technical advice where appropriate.
Do not copy a generic percentage table
A percentage that appears sensible in an example can still conflict with current law, front-load payment, fail to match actual progress, omit evidence, or allocate material and insolvency risk badly. Equally, a percentage alone does not prove misconduct or financial instability.
Questions for the proposed schedule
Which contract, legislation, and payment regime applies to the parties and work?
What deposit or advance payment is proposed, what does it fund, and what current limit or rule applies?
What exact work, material, delivery, test, certificate, or other objective evidence triggers each claim?
Who assesses the claim, by when, and what notice or response process applies?
When is an amount due, how is tax treated, and which entity and account should be paid?
How are variations, omissions, defects, incomplete work, delay, set-off, suspension, termination, and disputes handled?
Does title to materials pass, where are they stored, who insures them, and what happens if the contract ends?
Is retention, security, a trust arrangement, or another mechanism proposed, and is it lawful and suitable?
Evidence and assessment
Define the evidence needed for each claim before the claim arrives. Depending on the contract and work, relevant records might include measured quantities, delivery records, photographs, test results, certificates, inspection records, approved variations, statutory declarations, warranties, or professional certification. This list is not complete and does not establish what you are legally entitled to demand.
Separate administrative completion from technical, statutory, or contractual acceptance. A paid invoice, completed checklist, site photograph, or app status does not by itself certify compliant or defect-free work.
Retention and other security
Retention is a contractual security mechanism. Whether it is lawful, suitable, and how it must be held, claimed, released, accounted for, or disputed depends on current law and the contract. Do not withhold, set off, or use another party's money without advice.
Other mechanisms may carry different cost, insolvency, trust, documentation, and administration risks. Obtain project-specific legal and financial advice rather than selecting a mechanism from a template.
Cash-flow planning
Map the proposed claims, finance drawdowns, taxes, authority payments, long-lead deposits, contingencies, and known commitments over time. Use scenarios and update them when evidence changes. A planning calendar does not alter contractual due dates or lender requirements.
Put the agreed process in writing
Record the contract value, deposit, claim basis, evidence, assessment, notices, due dates, tax treatment, variations, defects, completion, security, release, dispute, and bank-detail verification process in the appropriate contract documents. Obtain advice on required forms and terms.