Reconciling a construction payment claim

Resources · Practical guide

The amount outstanding should be traceable through a single, consistent calculation. Before preparing a payment claim or adjudication application, reconcile the claimed work with previous claims, assessments, receipts and credits. This helps identify differences before they become disputed figures in a submission.

Establish the calculation basis

First determine whether the working statement is cumulative or relates only to the current period. A cumulative statement shows the total value claimed to date and then accounts for relevant previous payments and adjustments. A period statement identifies the work claimed for that period. Mixing the two can count work or payments twice.

Use clear column headings and identify the valuation date. Distinguish the amount claimed, the amount assessed by the other party, the amount invoiced and the amount actually received. Those figures are not interchangeable.

Separate the components

Show original contract work and variations separately. Within each, retain the claim-item references used in the supporting evidence. Record any claimed retention release, other adjustments and credits as identifiable lines rather than unexplained changes to a total.

For retention, reconcile the amount withheld, any release claimed and the contractual basis and timing relied on for release. Keep a deduction asserted by the other party visible as a disputed assessment; do not silently treat it as an agreed credit.

Match payments to records

Prepare a receipt schedule showing the date, amount and bank reference for each payment. Match the receipt to the remittance advice and the relevant claim or invoice where possible. Where allocation is disputed or unclear, identify the uncertainty rather than making the reconciliation appear settled.

Check payments received after the claim was prepared. Keep the original served claim intact and separately record later receipts so that the current outstanding balance is clear. Review credit notes and reversals against the transactions they relate to.

Check GST and arithmetic

Label amounts as inclusive or exclusive of GST. Apply the same treatment to claim items, payments, credits and summary totals. If a source record uses a different basis, show the conversion in the working calculation.

Recalculate the totals independently. Check line extensions, subtotals, percentages and rounding. Compare the final figure with the claim cover sheet, invoice, variation register and proposed submissions. Explain any difference rather than leaving the reader to work it out.

Keep a bridge from the claim to the balance

A useful reconciliation shows the claimed value of work, separately identified adjustments, relevant payments and the resulting balance. Each entry should lead to a record. Where the other party's assessment differs, show the difference item by item and link it to the reason given.

The reconciliation explains the money. It does not by itself establish that an item is legally recoverable. The contractual basis, relevant payment claim requirements and supporting evidence still need to be addressed.

Prepare for review

Keep the editable calculation together with a dated PDF copy, the original claims, payment schedules, remittances and bank evidence. Use our document checklist to assemble the wider file, or read how we assist to prepare payment claims.