Payment Certificate Invoicing Impact

This article explains what happens when an “Approved” payment certificate is changed to “Invoiced” status, and how the System automatically creates a sales invoice based on the payment certificate data, including the calculation of Total Retention and the distribution of the advance payment.

Before you start, make sure of the following:

• Changing the payment certificate status to “Invoiced” requires the “Invoice Payment Certificates” permission, in addition to one of the following invoice creation permissions: “Add New Invoices to All Clients”, “Add New Invoices to His Clients”, “Add Draft Invoices to All Clients”, or “Add Draft Invoices to His Clients”. Without these permissions, the button for changing the status to “Invoiced” is hidden.
• Enable the Construction application by going to Settings from the main menu, then selecting Apps Manager. The “Retention Routing” section appears in Accounts Routing settings only when this application is enabled.

Steps

• From the main menu, click Construction.
• Select Projects.
• Click the Actions button next to the required project that contains an approved payment certificate.
• Select View.
• Click the Payment Certificates tab.
• Click the Actions button for the required payment certificate. Its status must be “Approved”.
• Select View.
• From the top-right of the screen, click Invoice to change the payment certificate status to “Invoiced”. A confirmation message appears; click Yes.
  • At this point, the System creates a sales invoice using the payment certificate data and redirects you directly to the invoice creation screen.

• Review the invoice, then click Save.

After the invoice is actually saved, the payment certificate status is permanently changed to “Invoiced”.

System Behavior

Setting Up Retention Accounts

During the first invoicing of a payment certificate, a parent account named “Clients Retention” is added under Accounting → Chart of Accounts → Assets → Current Assets → Accounts Receivable. Under this account, a sub-account is created for each client with the name “Clients Retention (Client Name)”. The sub-account is created automatically when the first payment certificate for that client is changed to “Invoiced”. If the client’s name is changed later, the change is automatically reflected in the name of this account. These accounts are Debit accounts.

The “Retention Routing” section appears in Accounts Routing settings in the Accounting module, with two routing types: “Automatic Account Routing” (the default, which automatically uses the client’s retention account on every invoice) or “Specify per Each” (which allows the account to be selected manually for each invoice).

Fields Added to the Invoice

If the routing type is “Automatic Account Routing”, only the “Retention” field is added under the invoice’s Discounts & Adjustments tab. If the routing type is “Specify per Each”, two fields are added: “Retention” (pre-filled with the Total Retention value from the linked payment certificate) and “Account” (required, a dropdown similar to the adjustment accounts list, with the client’s retention account as the default value). These fields appear in sales invoices, sales refunds, and credit and debit notes.

If a credit or debit note or a refund is created for an invoice that includes Total Retention, the retention value is reflected in the note or refund and in its related journal entry, in the same way that adjustments routed to an account are reflected.

Invoice Creation

The generated invoice has the same client as the contract linked to the payment certificate, and this client cannot be changed. It also uses the same contract currency, which cannot be changed. The invoice lines include the Work Items included in the payment certificate, with their unit price, “New” quantity, and applicable taxes, if any. The invoice summary includes the Advance Payment Recovery value and Net Payable. The Total Retention value is added to the Retention field along with the client’s retention account in the Account field.

After the invoice is saved, the invoice number appears as a clickable link in the header of the payment certificate view screen. The generated invoice also appears under Sales → Manage Invoices and in the Invoices tab of the project view associated with the payment certificate.

Advance Payment Distribution

If the payment certificate has an Advance Payment Recovery value and the contract is linked to advance payment invoices with an unsettled balance sufficient to cover the recovery value, the recovery amount is automatically distributed to the advance payment invoice when the new invoice is created. If multiple advance payment invoices are linked to the contract, the amount is deducted from the first advance payment invoice whose unsettled balance is sufficient to cover the recovery value. If no sufficient advance payment is available, the invoice is not linked to any advance payment.

Validation Rules

• After the invoice is created from the payment certificate, its lines cannot be modified in any way, including the quantity, unit price, taxes, or item itself. New lines cannot be added, and existing lines cannot be deleted.
• You can only select the Cost Center and Sales Person and add adjustments or discounts to the invoice. These adjustments and discounts are calculated after Total Retention and do not affect its value.
• The Total Retention value itself cannot be modified on the invoice. Only the retention account can be modified, and only when the “Specify per Each” routing type is selected.
• The Total Retention value appears in the summary of the printable version of the invoice.