If you run a contracting company in Saudi Arabia, your cash flow lives and dies by one document: the progress claim. Whether your team calls it an IPC (interim payment certificate), a progress bill or a مستخلص, it is the monthly moment where work done on site becomes money in the bank — and it is also where most contractors lose the most time, the most margin and the most arguments.
This guide walks through how progress billing actually works on a Saudi project, where it breaks when it runs on spreadsheets, and what a contracting ERP should do about it. It is written for finance managers, quantity surveyors and project directors who are tired of closing the month with a pile of Excel files and a client who still hasn't certified last month's claim.
What a progress claim (IPC) actually is
A progress claim is a periodic request for payment based on the work completed so far, measured against the contract's bill of quantities (BOQ). Instead of invoicing at the end of a project, the contractor submits a claim each period — usually monthly — showing the quantity of each BOQ item completed to date, the value of that work, and the deductions that apply.
On most Saudi projects the cycle looks like this:
- Site measurement. Engineers record the quantities completed for each BOQ item during the period.
- Quantity survey. The quantity surveyor turns those measurements into a claim: cumulative quantity to date, minus what was certified last time, gives this period's work.
- Consultant or client review. The consultant checks the quantities, adjusts them where they disagree, and certifies an amount.
- Adjustments. Advance-payment recovery, retention, penalties and any approved variation orders are applied to the certified amount.
- Tax invoice. Once the certified figure is agreed, the contractor issues the tax invoice for it.
- Payment and tracking. The client pays — often late — and finance reconciles what arrived against what was certified.
Every one of those steps touches a different person and, in many companies, a different file.
Where progress billing breaks down
Most of the damage comes from the same handful of problems.
The BOQ lives in a spreadsheet that nobody fully trusts. When a variation order is approved, someone edits a copy of the BOQ. A month later, three versions are circulating and the claim is built on the wrong one.
Cumulative quantities are re-typed every month. Each claim starts from last month's certified quantities. If those numbers are copied by hand, one transposed digit survives for months and surfaces as a dispute.
Retention and advance recovery are tracked off to the side. These deductions run for the life of the contract. When they sit in a separate sheet, the retention balance the contractor believes it is owed and the one the client has recorded drift apart.
Subcontractor claims are not linked to the main claim. When a subcontractor bills against the work you are billing the client for, the two should reconcile. In practice they are often handled by different people in different files, so you pay for work you have not yet been certified for — and carry the cash gap.
The tax invoice is built separately from the certified amount. In Saudi Arabia the invoice has to be a compliant e-invoice, and it should match what was certified. When finance retypes the certified figure into the invoicing system, mismatches appear — and corrections mean credit notes and delay.
Nobody can see the project's true position. Without the claim, the cost and the subcontractor commitments in one place, the project director cannot answer a simple question: is this job making or losing money this month?
What a contracting ERP should do about it
A system built for contractors treats the progress claim as a controlled workflow instead of a document.
- One BOQ, with versions. The contract BOQ is loaded once. Approved variation orders create a new, traceable version instead of an edited copy.
- Claims built from cumulative quantities. The system carries forward last certified quantities automatically, so the engineer enters only the new measurement and the claim calculates the period value.
- Deductions handled by rule. Advance recovery, retention, penalties and other deductions are set up per contract and applied automatically, with a running balance you can see at any time.
- Certification tracked as a status. A claim moves from draft to submitted to certified, with the certified amount recorded next to the amount you claimed — so the difference is visible, and so are the reasons for it.
- Subcontractor claims linked to the work. Subcontractor certificates reference the same BOQ lines, so you can see what you have committed against what you have been paid for.
- E-invoice from the certified amount. The tax invoice is generated from the certified figure rather than retyped, in line with ZATCA e-invoicing requirements, so what you invoice is what was agreed.
- Cost against revenue per project. Committed cost, actual cost and certified revenue sit together, so margin is a live number instead of a month-end surprise.
A quick check: is your progress billing at risk?
If three or more of these are true, your process is costing you money:
- The BOQ exists in more than one version across the team
- Cumulative quantities are re-entered by hand each month
- Retention balances are tracked in a separate spreadsheet
- Nobody can say today how much certified-but-unpaid revenue you have
- The tax invoice is typed in after the certified amount is agreed
- Subcontractor claims are reconciled at the end of the month, not as they arrive
Questions to ask any vendor of contracting software
Ask for a live walkthrough of one full claim cycle on your own BOQ structure, not a slide deck. In particular:
- How are variation orders versioned, and can I see what a claim looked like before and after one?
- Can I set different retention and advance-recovery terms per contract?
- Does the e-invoice come from the certified amount, and how are adjustments after certification handled?
- Can subcontractor certificates be tied to the same BOQ lines?
- Can the site team enter measurements from a phone?
- What does project margin look like on day one of a new month?
Where to go from here
If you are choosing a system, our guide to the best ERP for construction companies in Saudi Arabia covers the wider selection criteria, and ERP for contracting companies goes deeper on costing and subcontractor control.
Work with us: see how our contracting ERP software handles BOQ, progress billing and subcontractors for Saudi contractors, or talk to us about a custom ERP built around your contracts.
FAQ
What is the difference between an IPC and an invoice? An IPC (interim payment certificate) is the certified statement of how much work has been completed and what is payable for the period. The tax invoice is the document you issue to collect that amount. The invoice should follow the certified figure, not precede it.
Why do progress claims get disputed? Most disputes trace back to quantities — a different BOQ version, a missed variation order, or a cumulative figure that does not match what the client recorded. A single controlled BOQ and carried-forward quantities remove most of them.
Can retention be tracked automatically? Yes. If retention terms are set per contract, the system can apply them to each certified claim and keep a running balance, so you always know the amount held and when it becomes due.
Does the progress claim need to be a ZATCA e-invoice? The tax invoice you issue for the certified amount must meet ZATCA e-invoicing requirements. A contracting ERP that generates it from the certified claim avoids retyping and the mismatches that follow.