This video is all about payment trackers, no preparing and maintaining a payment tracker is one of
the most important duties of a quantity surveyor.
Let's see what a payment is, how the input to a payment track recorded and what a payment tracker can
provide to the entire project team regarding the cost status of the project.
Mainly, the payment tracker is used to monitor the inward and outward payments.
Basically, any contractor or any construction company will have some input payments coming to them
and they'll also have some expenses.
That is the output payments that is incurred during the entire project duration.
Big companies, some standard companies have ERP systems.
Usually all these payment details are encoded into this ERP system.
Each project will be having a code assigned to it and there will be different supports regarding the
payments.
So based on that in word payments and the outward expenses are recorded into this from the different
commands, these cost details can be taken out from the ERP system.
There are also mid-level and small companies who don't have the budget for maintaining ERP system.
So they do it in a traditional way, like maintaining it using an Excel sheet.
Now let's see what I mean.
In word, payments are so involved.
Payments are basically the payments that you receive from your client for carrying out your works.
So this will include your advance payment for your mobilisations, your monthly work, then payments.
Each month you will be preparing an interim payment application.
So that will be certified by your client or the consultant.
Then the different variations that are out of work today works and other claims, yachties.
All these are also the works that you're carrying out for the project, which is not in your scope of
work as per the instructions of the client or the consultant.
You carry on this.
You also have the right for the payment for these additional works.
Then you have your retention, which usually you get after your completion of work.
And finally you'll have the final account that there will be some payments pending or some payment that
is held by the client or the consultant due to various reasons.
Finally, all the payment that is that you have the right to claim or the payment which you have not
received.
All these are included in the final account and that is settled.
So these are actually your payment, basically.
What payments are the payments done for the works done for that project, for the particular project
by the client?
Now there are the payments.
That is your expenses.
So carrying on this project, you will be having some expenses.
Also, like the preliminary expenses for setting up all your project, site offices, your camps, your
access to the project, all the safety requirements.
So initial set up to start the projects.
These are mainly the preliminary expenses.
Then you will be having some subcontractors under you.
You will be giving purchase orders to different suppliers to buy the different materials used for the
project.
So you will be having payments to be made to the subcontractors and suppliers.
Then you will have the salaries to be paid for direct and indirect stuff.
That is your management team, your site team, then your label, your skilled, unskilled laborers
who are directly working for the project.
Then you will have your utility bills, your electricity, water, your wife, your Internet connection,
cell phone bills.
You will be having expenses for maintenance.
You'll be sometimes you will be giving rent monthly rent for different facilities that you are using
for the project, different running expenses like your vehicle expenses, your fuel, petrol, then
your stationary diesel expenses.
That is happening throughout the project completion, your head office expenses.
You will during the tender process, you will be calculating a certain percentage for your head office
expenses.
Then again, you will be having some statutory expenses like your taxes as per the law, the government
requirements of that country, some municipality fees.
All these are your outport payments that you need to maintain to carry out the project successfully.
So I hope you have understood the difference between what and in what payment is an output payment.
Now, what can you understand from a payment tracker?
So we're seeing a payment tracker.
You can understand what the cash flow situation is.
You'll understand well how much money you have received till date.
What are the expenses you incurred delayed for?
You'll come to know the profitability or you will come to know the status of your project.
You will you can see if your project is going Kanellos or if it is going in a profit.
So based on that, you or management can take necessary action.
If your project is going and lost, you can understand what your payments are due, sometimes your client
will not have made your payments even after the payment due date has reached.
Based on the contractual conditions, there might be some charges for delaying payments.
So you can also record those payments.
Then you can also understand if you have done your payments to your suppliers and subcontractors within
the date mentioned as per the terms and conditions of the work or the purchase order, then there might
be some pending deliveries after payment.
You must have paid some advance amount to a supplier as per the terms and conditions the contract.
So they would not have done the delivery in the correct date, which they had promised.
So that you can do a follow up.
Then you can understand when the purchase orders or the work orders have been issued to the different
suppliers and the subcontractors when the delivery of material has been made.
This also you can include in the payment records and the date of submission of the invoice.
This is a very important item that is needed to be recorded by Cure's because there is a difference
between the invoice date and the submission date.
Sometimes the invoice date might be second of February, but the supplier might be something that is
maybe by after 15 days they'll be submitted, maybe 17th of February.
They will be submitting the invoice.
So your payment due will be based on when you have received the invoice.
This clause would have been specified in most of the purchase orders of the workers, like the payment
will be done within 30 days or within 60 days after the receipt of invoice.
So that is important.
So if you have received the invoice by 15 December and the date of the invoice is first December, your
payment due will also start from 15 December plus 60 days.
If the payment terms 60 days of 15 December 2015, February plus 60.
So within that date, you need to give the payment.
It should not be from 1st February plus 60 days.
That's an important thing.
That should not.
So it should be it should not be a date of birth.
The same should be date of invoice.
And they don't seem to often, so I'll correct that.
So here.
Submission is not there, so date of invoice and date of receptive invoice, so these two first two
important dates that need to be carefully checked by the police invoice being submitted.
Now, I have prepared a small payment tracker for suppliers to make you understand it clearly.
So this is a small payment tracker that I have made in an Excel sheet.
So this is basically just for the suppliers.
So, for example, your project, different suppliers supplying your materials.
So, for example, ABC, if you see the first, I just explain the first two.
So there's a supplier called ABC System and the different systems like MLP or Civil or Interior.
So I've just used its electrical and mechanical before for plumbing.
Then you can mention a Appio number, which you have given to the supplier.
Then you can just mention what type of material is being supplied by this supplier.
The be date.
What the bomb on this.
So here are the doneness.
This bill is being supplied in two different deliveries.
So that is why there are two.
The facilities are both are the same supplier.
So the payment is just Carmenere.
The period is also common.
All the system billing, no prescription, your date and the amounts are common here.
The delivery is sent to slaughter.
There are two deliveries made in different dates.
So that invoice has been submitted so different.
The invoice dates are different.
The invoice received dates are different.
The invoice amounts, for example, printed is 5000 USD two thousand five hundred USD of materials delivered
in the first load and totally dependent on the second floor.
Then the U.S. will be checking the amount of it is OK, and then they will be certifying the model that
is certified among the payment due date here.
What they've done is.
So I assume that the 60 days after the receipt of invoice or entry, so after 30 number plus 60, that
is 29 June 2001.
So you can also and in particular, if you have paid more and if I mention I have just a.
Put it at zero, that means we are not paid the amount because the due date has not come.
So this is this.
Table is being updated as per today's date.
So if you see the payment due amortise today's date minus B three Petrie's payment due date.
So it is 60 days.
So this payment to the supplier is not yet due, but we have another 60 more days till the payment to
be given to this for this particular LPO.
So for all these details we can get from here.
If you see the second one, it is similar, but here what is then is the amount has already been paid,
so there is no spending on one.
So there is there is no need to mention anything about payment overdue for this part.
If you take the payment is not done, it was six thousand with someone.
And depending on when the 6000 and the payments overdue, it has become overdue and almost 60 days still
from the due to become almost 60 today.
So we can understand that this supplemental to the plan has become overdue and we need to pay the supplier
as soon as possible so they might not deliver on other material if this if this payment is not done.
So this is clear here, also what you can do is from me, you can filter different things, like, for
example, I have put a formula here less subtotal to subtotal less for getting the some subtotal, nine
months for getting the some for the filter items.
So I put that.
Are more.
You have the total invoice on.
Those are different among I'm on the pavement and depending on so for example, if you need to know
for Çöpler ABC, what is the difference?
It is what you can do with just.
Just fill the ABC alone, you OK?
You have.
Given LPO worth of 13000 USD to ABC, the invoice they have done is 13000, you already certified 13000,
the payment doneness only eight thousand, and now the remaining 5000.
And that is this to help use this to purchase orders.
And the payment is not yet due.
So this is based on supply wise, you can again do based on your system is, for example, you can just
click on and you can know how many.
And no mechanical.
Purchase orders have been issued also here.
One hundred and thirty two thousand US dollars worth of purchase orders has been issued the invoice
doneness, one thirty two thousand certified, is already 132 pages, one to two.
So there is no pending amount.
This is just for the supplier.
Similarly, you can also make a payment tracker for your interest payments.
Then you can make maybe for your expenses, your other expenses can be made separately for vehicles
alone or for your utility bills alone.
Or you can also use that.
You can also make it all together in one sheet.
Then you subcontractor payment Tycho's can be made into another sheeter based on or you can also include
your subcontractors with this within this sheet, you can if, for example, you can add us up.
If there is a subcontractor, you can go and court systems subclan or something and your work order
and based on based on their work done and their invoices, you can enter all your subcontractor details
within this.
So your supplier and subcontractors can be made into one sheet.
You can your expenses of other expenses, like your bills, your maintenance, your rent, all those
can be done and none of the sheet.
Then you're inward payment can be done on unless ship.
So with this is the traditional method of making your payment tracker an Excel sheet.
If if you're using ERP system, it is very, very easy by giving a command, usually a SAP and Oracle,
the main ERP system being used by major companies.
There are also many, many different ERP systems available.
I have used Oracle System when I was working in UA and it was very easy by just giving a code, your
project code and your expense code, you can find how much expense as done for that particular.
For example, it is for this for utility bills.
There is a separate code that you can easily get details of how much the expenses have been incurred.
And if you have settled it, you can also scan your invoice copies and attach it to this into this ERP
system so you can also get a hard copy of the invoice, say, from the ERP system.
The supplier and subcontractor will also be having separate codes.
So under each of their invoices that you're encoding into the system, you can attach the scanned invoice
copy also.
So I hope the concept of payment is clear.