From progress bill to tax invoice
You will be able to: Follow the status path of a progress bill; Compute gross, retention, VAT, advance recovery and the net receivable of a bill; Handle a short certification.
- Read not done yet
- Self-check: not taken not done yet
- Lesson complete not done yet
A progress bill goes through five steps, each with its own status: draft, percentages entered, approved by the project manager, certified by the client, and invoiced. After the invoice it becomes part paid or paid as receipts are matched.
- Press New progress bill and type the percent done this period for each item. Save the percentages.
- The project manager presses Approve.
- Record the client's certificate number. If the consultant certified less than you claimed, type the certified gross; the lines scale to it, and what is carried, disputed or written off is recorded.
- Press Issue the tax invoice. The bill becomes a normal sales tax invoice in the ledger, tagged by project and item.
- Receipts reduce the receivable and move the bill to part paid or paid.
The invoice charges VAT only on the part billed. The retention is shown as a negative line on the invoice and its VAT is declared on the release. The advance is recovered at the contract percent. The bill warns when its date is more than 14 days after the certificate date, because the date of supply and the invoice deadline follow the events, not your workload.
| Line | Bill 1 | Bill 2 |
|---|---|---|
| Certified gross | 300,000 | 320,000 |
| Retention withheld (10%) | 30,000 | 32,000 |
| Taxable (gross less retention) | 270,000 | 288,000 |
| VAT 5% | 13,500 | 14,400 |
| Tax invoice total | 283,500 | 302,400 |
| Advance recovered (net) | 30,000 | 32,000 |
| Advance VAT reversed | 1,500 | 1,600 |
| Net receivable | 252,000 | 268,800 |
Bill 2 takes the cumulative percentages to Substructure 100%, Superstructure 60% and Finishes 10%: cumulative gross 620,000, so this bill is 620,000 - 300,000 = 320,000.
A short certification
If you claim AED 300,000 and the consultant certifies AED 285,000 (95%), the lines scale and the invoice follows the certified figure: retention 28,500, taxable 256,500, VAT 12,825, invoice total 269,325. The difference of 15,000 is recorded as carried forward, disputed or written off, so it does not disappear.
Walk it through
- Recompute bill 1 with 50% on Substructure and 30% on Superstructure.
- Write the net receivable and check that gross, retention, VAT and advance add up.
- In the demo, open Progress bills on the Billing tab and walk a draft bill to the point where it asks for the client certificate number.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Statuses: draft, percentages entered, PM approved, client certified, invoiced, part paid, paid.
- VAT is charged on gross less retention; advance VAT is reversed pro rata.
- Short certification scales the lines and records what is carried, disputed or written off.
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.