Down the chain

What you certify down, not just what you claim up

A main contractor values up to the client and down to subcontractors in the same month. Two systems means two chances to get it wrong, and one figure nobody can reconcile.

Certified up and certified down shown side by side
Retention held from you against retention you are holding
The difference stated as a figure, not left to be worked out

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Cash position

Subcontractor cash gap

Certified to client£84,115.00

Certified to subcontractors(£61,300.00)

Retention held from you(£4,205.75)

Retention you are holding+£1,839.00

Net position on this job£20,448.25

A job funding itself and a job you are financing look identical on a certificate. They look completely different on the dashboard.

The cash position is the point

On its own, neither figure tells you much.

What matters commercially is the gap: what the client has certified to you against what you have certified down. A job funding itself and a job you are financing look identical on a certificate. They look completely different on the dashboard.

Subcontractor Valuations

The same engine, pointed the other way

Subcontract valuations use exactly the same calculation as client certificates.

Each subcontract priced separately with its own package value
Its own retention rate, which rarely matches the main contract
Its own statutory dates, because the subcontract may sit on a different form

Subcontractor Valuations

Torabuild Ltd, valuation 03

Subcontract

£68,400

Certified

£31,050

Retention 3%

£932

This period, exc VAT£9,400.00

Less retention at 3%(£282.00)

Due to subcontractor, exc VAT£9,118.00

What differs is what belongs to each package: its own value, its own retention rate, and often its own contract form with different day counts.

Client view

The client never sees any of it

What you pay a subcontractor and what you hold from them is your commercial position, not the client’s.

The whole subcontractor side is hidden from client guest links
Hidden from client-facing reports and the final account statement
Turn the section off entirely on jobs that have no subcontractors

Client view

What a client guest sees

Valuations and certificatesVisible

Variations and final accountVisible

Subcontractor valuationsHidden

Cost report and risk registerHidden

What you pay a subcontractor and what you hold from them is your commercial position, not the client’s. It is also the fastest way to invite a conversation about your margin.

See it running before you sign up

Retention

Two retention rates, and the money between them

You hold retention from every subcontractor at the rate in each subcontract, and the client holds retention from you at the main contract rate.

Each subcontract carries its own retention rate
Retention held from you shown against retention you are holding
Separate release dates tracked down and up the chain

Retention

Held down against held up

Held from you

£4,206

You are holding

£1,839

You finance

£2,367

Retention held from you at 5%£4,205.75

Retention you hold from subcontractors(£1,839.00)

Net retention you finance£2,366.75

More is held from you than you hold down the chain, so the retention on this job is money you are financing until the release dates come round.

Cash flow

When the money goes out before it comes in

Certifying up and certifying down in the same month does not mean the cash moves in the same month.

Receipts from the client on the contractual payment dates
Payments to subcontractors on their own cycle
Peak funding requirement stated, with the month it occurs

Cash flow

Forecast

Peak funding

£42,800

Occurs

Nov 26

Cycles left

Sep 26 · actual(£28,300)

Oct 26 · actual(£39,100)

Nov 26 · forecast(£42,800)

Dec 26 · forecast(£31,600)

The peak is the deepest point of the cumulative position. It is the sum the job needs funded before the client’s money arrives.

Subcontractor valuations

Nominated Subcontractors, and packages on FIDIC

Not every job runs on a UK subcontract.

Nominated Subcontractors under Clause 5 valued like any other package
Each package keeps its own retention rate and its own release dates
Its own payment cycle, counted in calendar days where the job runs on FIDIC

Subcontractor valuations

Nominated package, FIDIC Clause 5

Package

£640,000

Certified

£288,000

Retention 10%

£28,800

This period, exc VAT£96,000

Less retention at 10%(£9,600)

Due to Subcontractor, exc VAT£86,400

Nominated under Clause 5, on an example rate. The first half of retention releases at Taking-Over, the balance at the end of the Defects Notification Period. Dates and taxes are published starting points to verify locally.

Who it is for

One chain of payments, four places on it

You are applying

You certify down while applying up

You certify your subcontractors down the chain while your own application runs up it, and the gap between the two cycles is your cash position.

Applying for payment

the same measurement

You are certifying

You certify the top of the chain

You certify the main contractor, and what they owe their chain is not your contract - but their insolvency risk is your project risk.

Certifying payment

You are doing both

You pay the chain from your own account

You pay the packages yourself, on their own retention and their own dates, while chasing your own money on a different cycle entirely.

Doing both yourself

You are reporting

You watch the chain for the lender

You watch the chain below the borrower: money that stops moving down the chain is the earliest warning the facility ever gets.

Recommending a drawdown

The client, the architect and the tenderer are not on this list. They are the people you let in on a link: they see the one document you sent them, answer it, and that answer is written into the record. No account, no licence, no charge, on every plan.

FAQs

The questions this page raises most often, answered without a sales pitch at the end.

No, and it usually does not. Each subcontract carries its own rate. The difference between what you hold down the chain and what is held from you is real money and appears in the cash position.

Yes, if you give them a guest link. They see their package and nothing else: not the client side, not other subcontractors, not your cost report.

It follows the subcontract. Under the Construction Act the payer issues a payment notice, so that is usually the correct name rather than certificate. You can set it per project.

Turn the subcontractor side off in settings. It disappears from the sidebar, the dashboard and the final account, so you are not looking past empty panels on every screen.

Yes. A Subcontractor nominated by the Employer under Clause 5 is valued and paid down the chain like any other package, with its own value, retention rate and cycle. On FIDIC the dates run in calendar days, and the statutory dates and taxes shown are published starting points to verify locally.

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The Construction Industry Scheme in working order: verify the subcontractor, deduct 20, 30 or nothing from the labour element, exclude materials and VAT from the base, file the return every month. Where each number comes from, and the two errors that cost real money.

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My subcontractor wants a deposit before starting. Should I pay it?

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My subcontractor walked off the job and still wants paying. Where do I stand?

Before anything else, check one thing: were his applications paid? A subcontractor suspending over non-payment under section 112 is exercising a right, not abandoning. Where the walk-off is real, how to value what he left and deduct properly.

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All 174 pieces

Keep reading

The three parts this page leans on

Client valuations Interim valuations and payment certificates by percentage or fixed sum, with retention and previously certified. UK JCT and NEC, plus FIDIC certificates. See how it works Retention Full rate during the works, half rate after practical completion in the UK, or FIDIC release at Taking-Over and the end of the Defects Notification Period. See how it works Dashboard The commercial position of every job on one screen: contract sum, certified to date, retention held, cash position and the statutory deadline that is closest. See how it works