How a contractor's money flows
You will be able to: Describe the cycle from tender to final retention release; Explain why a profitable contract can still run short of cash; Match each stage of the cycle to the part of Zeyto Construction & Contracting that records it.
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A contractor sells work it has not yet done, buys most of it from other businesses, and is paid in instalments after someone else certifies the progress. Three things make this different from trading: revenue belongs to a contract rather than to a sale, cost is incurred before cash arrives, and part of the price is held back or paid early (retention and advance). A contracting ERP exists to keep those three things visible for every project.
Show transcript
1. Home shows the numbers a director asks first 2. Open the Portfolio: one tile for each project 3. Open Projects, the register of jobs 4. Open one project to reach its hub 5. The project menu groups the work by job 6. Structure: the breakdown of the work 7. BOQ: the measured items with quantity, rate and amount 8. Budget: what you plan to spend, by nature 9. Billing: the contract, progress bills and retention 10. Finance: budget, commitments and actual cost
The cycle in eight steps
- Tender: price the bill of quantities and win the job.
- Contract: agree value, advance, retention, defects period and payment terms.
- Mobilise: the client may pay an advance.
- Buy and build: materials, subcontractors, own staff, hired workers and plant.
- Measure: record what percentage of each item is done.
- Certify and bill: the client or consultant certifies, you issue a tax invoice.
- Collect: the client pays the bill less retention.
- Close out: practical completion, defects period, final account, release of retention.
| Stage | The money question | Where Zeyto Construction & Contracting keeps it |
|---|---|---|
| Tender | What will it cost and what price wins? | Projects, Tenders and the estimate |
| Contract | What did the client agree to pay, and when? | The contract on the project's Billing tab |
| Buy and build | What have we committed and spent? | Purchase, Inventory, People and the project hub |
| Certify and bill | How much may we invoice now? | Progress bills on the Billing tab |
| Collect and release | Who owes us, and what is held? | Finance Hub: receivables and retention |
This is why the system tracks four balances beside the profit: what is billed, what is collected, what is held as retention and what is still owed to suppliers and subcontractors.
Walk it through
- Draw the eight steps for a project you know, with an AED amount beside each.
- Mark the first month in which your cash would turn negative if the client pays 30 days after invoice.
- If you have demo access (request it through the Zeyto contact page), open Projects and find where each of the five stages in the table is recorded. Without access, write down which report or screen in your own system answers each money question.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Revenue belongs to a contract, cost comes first, cash comes last.
- Retention and advance move cash without moving profit.
- Track billed, collected, held and owed, not only margin.
Check yourself
4 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.