What is a progress certificate?
In contracting, the contractor doesn't wait until project end to get paid — they submit a periodic “progress certificate” for the value of the work executed that period. The certificate is the link between work on the ground and the money. Let's understand how it's built and computed correctly.
The idea in a minute
Then the prior certificates total is subtracted to get this period's work value. VAT is then computed on the work value, and retention, advance recovery, and penalties are deducted — the remainder is the contractor's “net amount due.”
The certificate cycle, step by step
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1. The bill of quantities (BOQ) — the contract reference
Before any work starts, both parties agree on a schedule of every project item: the contracted quantity and unit price per item. This schedule is the reference every certificate is measured against.
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2. Measurement — what was actually executed
At the end of each period (a month, say), the quantities executed on site are measured per item. This determines the “cumulative executed work” up to the certificate date.
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3. Computing the period's work value
Period work value = (cumulative executed work + materials delivered to site) − prior certificates total. You take everything done so far and subtract what was already certified — the remainder is this period's work.
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4. VAT on the work value
VAT is computed on the period work value (the work itself) — before any withholdings. Retention, advance recovery, and penalties don't reduce the tax base; they're deductions from the amount due, after tax.
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5. Withholdings — retention, advance recovery, penalties
From the work value + VAT, the following are deducted: the retention percentage (returned to the contractor at project end), part of the client advance (gradual recovery), and any late penalties. The remainder is the contractor's net amount due on this certificate.
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6. Approval, then collection
The certificate is reviewed and approved (consultant/management). After approval, revenue is recorded and the net due becomes a receivable on the client — collected like any claim. The next certificate starts from the new cumulative execution.
Why does a progress certificate matter?
A certificate lets the contractor get paid in stages as work progresses — not at project end — preserving the cash flow the work runs on.
It makes crystal clear what's retained on the project (guarantee) and recovered from the advance — numbers that get lost when computed by hand.
Each certificate ties to a measurement and a BOQ, so the claim is backed by real work and leaves an auditable trail — protecting both sides.
Terms you should know
Interim vs final certificate
An interim certificate is issued periodically during execution to pay for the period's work. The final certificate is issued at project end and closes the account — and it's usually where retention is released.
Retention
A percentage (typically 5–10%) withheld from each certificate as a quality guarantee, returned to the contractor after the warranty period. It's a receivable on the client in the contractor's favor until released.
The advance and its recovery
A payment the client makes up front to fund the start of work, recovered gradually by deducting a share from each certificate until it's fully repaid.
Measurement (take-off)
The process of measuring quantities actually executed on site and comparing them to the BOQ. Accurate measurement is the basis of any correct certificate.
Progress certificates in Zemam
Zemam runs the full certificate cycle inside its contracting module: a BOQ, measurements, and a certificate that computes the net due with its retention, advance, and VAT automatically. The certificate passes an approval path before posting, and on approval the entries post and the due amount becomes a receivable on the client. Revenue is recognized when the certificate is approved (the certification method).
Want to run your contracting and certificates properly?
Zemam computes the certificate with its retention, advance, and VAT, approves it before posting, and shows each project's profit from the books. Try it free — our team helps you set up.