Projects · Daily operations · 9 min read

Buy for the project and manage subcontract claims

Raise and approve purchase requests, turn them into draft purchase orders, track materials and certify subcontractor claims.

Before you begin

The Project procurement and Subcontracts and claims features must be on. You need project.edit to raise requests and subcontracts. Approving requests and certifying claims needs project.budget.approve, and must be done by someone other than the person who raised them.

Steps: purchase request to purchase order

1. Open the project, Procurement tab, Purchase requests, and press Purchase request.
2. Enter What is needed, the Kind (Material request or Purchase request), the Vendor and Required by.
3. Add lines with Description, Qty, Unit and Rate. The amount is quantity x rate.
4. Press Save, then Submit. A request with no lines is refused: 'Add lines to a draft request, then submit it.'
5. An approver presses Approve. If you raised it, you see 'Somebody other than who asked must decide it.'
6. Press Create Purchase Order. A vendor is needed first: 'Choose the vendor first.'

The approved request counts as committed cost. Example: 120 m3 of concrete at AED 310 is AED 37,200.00.

What happens next with the order

A draft purchase order appears in Purchasing carrying the project, branch, department and cost centre. The request state becomes Ordered. When Purchasing confirms the order, the order amount counts as committed instead of the request, never both. When the vendor bill posts, committed cost falls by the billed amount and actual cost rises by it.

Only an approved request can be ordered ('Only an approved request can be ordered.') and only a draft can be edited ('Only a draft request can be changed.').

Steps: material plan

1. On Procurement, open Material plan and press New.
2. Enter the Material, optional Product, UOM, Task and Required date, and the Planned qty.
3. Type the Reserved, Purchased, Received, Issued, Consumed and Returned quantities as work progresses. They are typed by hand and are not linked to stock moves.

Steps: subcontract and claims

1. Open Procurement > Subcontracts and press Subcontract.
2. Choose the Subcontractor, the Type (Subcontract, Service or Rental), the Value, Retention %, Advance % and the Scope. The scope is required.
3. Press Activate. Claims are accepted only on an active subcontract: 'Activate the subcontract before claims.'
4. Press New claim. Enter Amount claimed, Progress %, Period end and a note.
5. Move the claim along: Reviewed, then Verified (enter the verified amount), then Certified. Certification needs project.budget.approve and cannot exceed the verified amount: 'Cannot certify more than was verified.'
6. Press Raise vendor bill.
7. After Accounting pays the bill, mark the claim Paid.

Worked example

Subcontract AED 200,000, retention 10%, advance 10% with a vendor advance of AED 20,000. Claim 50,000, verified 50,000, certified 50,000. Retention is 5,000. Advance recovery is the smaller of 5,000 and the 20,000 advance, so 5,000. Net 40,000. Committed falls to 150,000; the 50,000 counts as subcontract actual cost.

The vendor bill is for certified less recovery, AED 45,000, with the project dimension. The retention of 5,000 then moves from Accounts payable to Retention payable. If the bill stays draft, press Post retention after Accounting posts it; before that you see 'Post the claim's vendor bill first.'

Good to know

• A claim that is only Claimed cannot be certified directly: 'A claimed claim cannot be certified.'
• Costs on one project appear in Commercial > Purchase Requests, Commitments and Subcontracts, which list every project.
• Switching a feature off refuses changes but keeps records readable.