Progress Invoicing for Muscat Contractors and Subcontractors

Start from one quotation

Quote the whole job first, with the scope written clearly and amounts in rials to three decimals. When the client accepts, turn the quotation into a sales order. That sales order becomes the reference for every stage invoice, so the client, the site team and your accounts all point to the same figures.

Agree the stage list at this point, not later. Write down what each stage is called and what must be finished before it can be billed, so that an invoice does not start a dispute about what complete means. Stages can follow progress on site, a consultant's certificate or the dates in the contract.

Invoice stage by stage

For example, a fit-out contract of OMR 12,000.000 is agreed in four equal stages of OMR 3,000.000. Each stage invoice carries 5% VAT of OMR 150.000, so the client is invoiced OMR 3,150.000 per stage. Describe each stage clearly, such as 'Stage 2: partitions and electrical first fix', and keep the sales order number on the invoice.

Equal stages are only an example. Many contracts use uneven stages, a first payment on signing or amounts certified by a consultant. Whatever your contract says, raise each invoice from the sales order, so you can always see what has been billed against the contract value. Keep the description of each stage identical on the quotation, the sales order and the invoice, so the client sees one list from start to finish.

Track what is paid

A stage invoice that has been sent is not money received. Give each invoice a payment term so it has a due date, then watch its status: unpaid, partly paid or paid. Clients often pay late or pay only part of a certified amount, so the status list becomes your daily follow-up sheet.

• Sort overdue invoices by client and call the largest balance first
• Record part payments as they arrive instead of waiting for the full amount
• Note the reason when a client pays less than a stage invoice
• Review open stages before you start work on the next one

Send purchase orders to suppliers

Materials and subcontractors are the other side of the job. Issue a purchase order to each supplier or subcontractor with the item, quantity, agreed price and delivery location. A written order protects both sides when a delivery is short or a price changes, and keeping orders and invoices in one place makes it easier to look at cost and billing together.

If you are the subcontractor, the main contractor may send you a purchase order. Quote its number on every invoice you raise against it, because accounts teams usually match invoices to orders before they pay. If you are the main contractor, do the opposite for your own subcontractors: issue the purchase order first, so their invoices have an order to be matched against.

Correct a stage with a credit note

If a stage was billed too high, do not edit the invoice. Issue a credit note against it. For example, stage 2 was invoiced at OMR 3,000.000, but the client certified work worth OMR 2,500.000. A credit note for OMR 500.000 plus OMR 25.000 VAT, OMR 525.000 in total, brings the stage down to the certified figure.

Send the client the credit note with the corrected position, so both sides see the same balance. Keep it linked to the original stage invoice and state the reason on it, such as work certified at a lower value. TAQNIX ERP supports credit notes next to invoices with 5% VAT. For how VAT applies to a correction, check with the Oman Tax Authority or your accountant.