Cash flow is the lifeblood of any construction business. And nothing kills cash flow faster than late payments, disputed claims, or variation work that somehow never makes it onto an invoice.
If you do commercial construction work in Australia, progress claims are your main mechanism for getting paid. Get them right and the money flows. Get them wrong — or worse, miss the process entirely — and you can find yourself chasing payments for months while your own suppliers are sending increasingly firm reminders.
What is a progress claim?
A progress claim is a formal payment claim submitted by a subcontractor to a head contractor during the course of a project, requesting payment for work completed up to a specific point in time. Commercial construction is paid in stages — you claim for what you have done, the head contractor assesses and responds, and you get paid. Or you adjudicate if they dispute it.
Progress claims are governed by the Security of Payment legislation in your state or territory — which gives you enforceable rights around the claims process, including the right to fast-track adjudication if needed.
The basic progress claims process
- Submit a payment claim on or before the reference date in your sub-contract
- The head contractor has a set number of business days to respond with a payment schedule
- If they accept, they pay by the due date
- If they dispute the claim, they must issue a payment schedule setting out what they will pay and why they are withholding anything else
- If you disagree, you can pursue adjudication under SOPA
Miss the reference date and you miss the claim period. Progress claims must be submitted by the date specified in your sub-contract. Submit late and you may not be able to claim until the next reference date — which could be a month away. Set a reminder. Every time, without exception.
What to include in a progress claim
- Your company name, ABN, and contact details
- The head contractor's details and the project name and number
- The claim number and the reference date it relates to
- A clear description of works performed this period
- The cumulative value of work completed to date, and the value this period
- Any approved variations included in the claim
- Less: previous payments received
- The net amount claimed, plus GST
- A statement identifying the document as a payment claim under the relevant Security of Payment Act
That last point matters. Some states require the claim to explicitly reference the Security of Payment Act to trigger its protections. Get state-specific advice on the exact wording required.
Retention — when do you get your money back?
Retention is typically five percent of your sub-contract value, withheld as security. Standard practice releases half at practical completion, with the remainder at the end of the defects liability period — commonly twelve months later. Keep a retention tracker on every project and chase it when it is due. It is easy for this money to fall through the cracks when everyone moves on to the next job.
Variations — the money most tradies leave on the table
Variations are one of the biggest sources of unpaid money in Australian commercial construction. Work gets instructed verbally, it gets done, and then nobody can agree on whether it was a variation or what it was worth. The solution is disciplined variation management from day one.
- When you receive a verbal direction to carry out work outside your scope, immediately follow up in writing — even a short email with a cost estimate attached
- Keep a numbered variation register on every commercial project
- Submit variation claims as they arise — not at the end of the project when memories are conveniently hazy
- Know the variation claim time limits in your sub-contract — miss them and you may lose the entitlement entirely
The golden rule: If you are doing work outside your original scope and you have not submitted a variation claim, you are doing it for free until proven otherwise. Do not let that happen on your projects.
When your claim is disputed
Head contractors dispute progress claims for all sorts of reasons — sometimes legitimate, sometimes as a cash flow management tactic. When this happens, understand exactly why before responding. Then try to resolve it directly with a clear, professional written response addressing their specific concerns. Many disputes resolve at this stage.
If direct resolution fails, adjudication under the Security of Payment Act is available to all subcontractors under commercial construction contracts. It is a fast-track process — typically decided within ten business days of appointment — and it is not litigation. It does not have to be slow or expensive. But understanding the process before you need it is far better than learning on the fly.
Getting the paperwork right
Progress claims take time and attention to prepare properly — and for busy subcontractors running a team, the administration side of the business often suffers. A professional estimating and project administration service can take the claims process off your plate, track your variations, and make sure the right documentation goes out at the right time. The cost of getting it wrong is measured in the money you should already have in your account.