Page 300 - TCDB combined Book

278 The Complete DESIGN BUILDER

Progress Billings:

Most projects will have a payment schedule that will require periodic billings or payment
on completion of a particular item or event. The most common method is monthly billings based
on the progress of work. A specific Holdback amount will be retained for a certain period
regulated by the jurisdiction of the project location. After preparation of the project budget a
"Contract Schedule of Values" will result and be the basis for all billings. The standard billing
method would cover a one-month period of work progress submitted at the end of each month.
Payment would be due upon receipt or by the (15th) fifteenth of the month following. This b illing
method could result in forty-five day payment terms and therefore will require some financial
reserve and planning.

All subcontractors should be aware of the particular payment schedule for each project
and have similar terms included for their Contract Agreements. For projects that do not require a
Statutory Holdback requirement or a specific Progress Billing period there can be a flexible
payment schedule. The flexible payment schedule could include a downpayment provision and
subsequent lump-sum payments upon completion of established benchmarks or events and is a
common method for smaller and Non-Turnkey projects.

The type and method of Progress Billing procedure will usually depend on the approval
process required. On projects that have a "Payment Certifier" there will be a requirement for
formal Progress Billings due for payment within thirty days of approval and include a Holdback
retention amount. On projects where there is complete control and direct billing to the Client a
more flexible and favorable arrangement can be considered. The type of billing procedure
implemented should have been presented to the Client in your original Proposal and subsequent
Contract Agreement.

Subcontractors and major suppliers should be made aware of the cut-off date for
submission of their Progress Billings and allow for any items that are expected to arrive on or
prior to the last day of the current billing period. Some billing situations will dictate that you
speed up or hold off a pending delivery or event for a certain period, to ensure either the inclusion
or exclusion of certain items in the current billing period. With cash flow being a major concern,
the Progress Billing preparation will require full attention and close scrutiny before submission of
any formal billings.