Work is agreed on site and invoiced in the office, and the gap between the two is the most expensive stretch of any building project. The site manager approves an extra item, the foreman notes it on a sheet of paper, and weeks later somebody in accounts is hunting for the basis of a line that appears in no contract. In parallel, the stage of completion needed for the next interim payment sits in one person's head, so the invoice goes out late, goes out short, or goes out with a breakdown the client rejects. Neither is a communication problem. Both are data problems. Interim payments, variations and the final account are tied by law to fields and deadlines that can be modelled: to a statement of work done, to a dated quotation, to a clock that starts when a change request reaches the contractor. This article sets out which fields a stage of completion needs, how a variation is run as a case of its own with a deadline and an instruction, and how that produces a final account that can be checked without rework. How we map such a chain inside a company is described under process analysis.
Key takeaways
- An interim payment pays for a measured state, not for a promise. German law ties it to the value of the work performed and requires a statement that allows a quick and reliable assessment - that is a specification for fields, not a question of wording.
- A variation is a case of its own with a clock of its own: change request, quotation for the increase or reduction in remuneration, then the instruction in text form. Run it as a line in the final account and the history is gone exactly when it is needed.
- If the amount stays in dispute, the interim payment may include 80 per cent (section 650c paragraph 3 German Civil Code) of the additional remuneration quoted. Only a company whose variation quotation is dated, numbered and demonstrably delivered can use that route.
- Whether the final account can be checked is a deadline, not an opinion: without substantiated objections within 30 days (section 650g paragraph 4 German Civil Code) it counts as checkable. That clock only runs where the date of receipt can be evidenced.
- All four stages carry the same data. A company that keeps measurements, hours, photos and variations on the project record produces interim payments and the final account by selection rather than by retyping - and holds the evidence in the same move.
Why the money arrives later than the work
Construction work is paid for in advance by the contractor. Materials, wages and plant are settled long before the first euro arrives from the client, and the larger the project, the longer that stretch runs. It can also be measured: the average days sales outstanding rose in the first half of 2026 to 40,35 days (Creditreform), and the same analysis finds particularly long outstanding periods in business relationships with the construction sector (Creditreform). In that position, issuing an interim invoice a week later than possible extends your own pre-financing by a week without anyone having decided to do so.
The average payment term granted in the same period was 32,21 days (Creditreform). That clock, however, only starts with an invoice, and an invoice only exists once somebody knows the stage of completion. This is precisely the part of the chain a company controls itself: not the client's payment behaviour, but the days between reaching a stage of completion and invoicing it. The same distinction between handling time and idle time sits behind the question of how to shorten lead times by attacking idle time.
Three places produce that idle time almost every time. First, the stage of completion is not recorded but remembered: the measurements are on a pad, the hours in the foreman's folder, the photos on a private phone. Second, nobody owns the trigger for the interim invoice - the site manager waits for the office, the office waits for the site manager. Third, additional work piles up as loose notes until somebody tries to turn the memory of a shouted instruction into a substantiated line item. How mobile capture of measurements, day sheets and hours addresses the first of those is covered in digitisation in the trades; this article picks up behind it, at the commercial chain.
What an interim payment is in law
The stage of completion: what an interim invoice really needs
A stage of completion is a data record with a cut-off date, not a gut feeling. It answers three questions: which items of the bill of quantities have been delivered and to what proportion, what evidences that, and how much of it has already been invoiced. Once those three sit in one place, the interim invoice becomes a selection task: pick the cut-off date, confirm the items, generate the statement. Where they are missing, every interim invoice turns into a small investigation with queries to three different people.
The most important addition is the origin of each field. The contract quantity comes from the bill of quantities, the delivered quantity from the site measurement, the evidence from photos and time sheets, the already invoiced share from your own sales ledger. Wherever one of those origins is missing, a field appears that somebody estimates - and estimated fields are precisely the ones argued over later. A stage of completion without a link to a measurement is not a basis, it is an assertion with a date on it.
Field | Content | Origin
---------------------+-----------------------------------+---------------------
Project | Site, section, contract | Order data
Item | Number and short text from the BoQ| Bill of quantities
Contract quantity | Quantity, unit, unit price | Bill of quantities
Delivered quantity | Site measurement at the cut-off | Mobile capture
Cut-off date | Date of the stage of completion | Capture
Evidence | Photo, measurement sheet, hours | Attachment on case
Variation share | Open variations with status | Variation case
Already invoiced | Sum of earlier interim payments | Sales ledger
Only the first column is the same on every project. The second is created on site,
the third is pulled by the system itself. Whatever comes from a source does not have
to be checked again in the invoice - and does not age inside a copy.Two fields are regularly forgotten and cost the most at the end. The first is the cut-off date: without it there is no way to say whether a piece of work belongs in this interim payment or the next, and double-billed quantities are the fastest route to a reduced payment. The second is the evidence. A photo attached to the case is part of the statement; the same photo in a messaging app is lost. What an orderly, traceable filing system for such documents looks like is described in GoBD-compliant document storage.
A variation is a case, not a line
The shouted instruction on site is the normal case, not the exception. Somebody wants a different tile, an extra socket, a wall ten centimetres further along. The problem is not the instruction, it is that it stays in that form. A variation needs the same structure as an order: a number, a date, a sender, a description, a quotation, a status. Only then does a request become a case that can be tracked, priced and, if it comes to it, evidenced.
The law thinks in exactly those terms. Where the client requests a change, both sides first seek agreement on the change and on the increase or reduction in remuneration, and the contractor is obliged to produce a quotation for it (section 650b paragraph 1 German Civil Code). That quotation is the pivot of the whole chain: the instruction hangs off it, the amount included in the interim payment hangs off it, and in a dispute so does the question of who demanded what and when.
In practice this means the variation is created on the day of the instruction, not on the day of the final account. A short entry on site with a photo, a reference to the item in the bill of quantities and the name of the person instructing is enough to start. Pricing follows in the office, the status moves from 'captured' through 'quoted' to 'instructed' or 'declined'. The same movement from a loose inbound message to a traceable case is described in from shared mailbox to traceable case for correspondence.
Its own number and date
Every variation is a document with a running number on the project. Without a number there is no reference for a later invoice or instruction to rely on.
Who asked for it is recorded
The name and role of the person instructing belong in the case. Where somebody acts without authority, that is the decisive entry later - and it cannot be reconstructed.
Receipt as the start time
Record when the change request reached the contractor. Every deadline in the construction contract counts from that moment, not from the day the office got round to it.
Quotation for the remuneration
Increase or reduction with quantities, unit prices and mark-ups. Where the original costing is stored, it can be used to carry the prices forward.
Evidence on the case
Photos of the state before and after the change, measurement sheet, time sheet. Attached to the variation, not in a folder whose structure only one person understands.
Reference to the item
Every variation points at the item in the bill of quantities it changes. Only then can the final account be held against the contract without manual work.
The 30-day clock between request and instruction
For the construction contract the legislator built in a clock that many companies never use, because they do not record the starting point. If the parties reach no agreement within 30 days (section 650b paragraph 2 sentence 1 German Civil Code) of the change request reaching the contractor, the client may instruct the change in text form. That relieves both sides: there is a way out of the stalemate, and it carries a date.
For cash flow the second rule matters even more. Where the parties have not agreed on the amount, the contractor may include 80 per cent (section 650c paragraph 3 sentence 1 German Civil Code) of the additional remuneration named in the variation quotation when calculating interim payments. The precondition is not negotiating skill but a data record: a quotation under section 650b paragraph 1 sentence 2, dated and received. A company that keeps variations as notes simply does not have that option.
Step 1: capture the request the moment it is voiced
The entry is created on site with date, time, name and photo. The date of receipt is the only field that cannot be reconstructed afterwards.
Step 2: produce the quotation for the additional remuneration
Quantities and prices from the stored costing, mark-ups by the same rule as the main order. The quotation goes out in text form and is filed on the case.
Step 3: let the deadline run visibly
The case shows how many days have passed since receipt. A reminder before the deadline expires replaces the calendar in the site manager's head.
Step 4: record the agreement or the instruction
If agreement is reached, the price is confirmed and the status set. If the instruction arrives in text form, it is filed on the variation - it is the basis for carrying out the work.
Step 5: check what can go into the next interim payment
If the amount stays in dispute, the permissible share is included in the next interim payment and noted on the case. The dispute then moves out of the cash position and into clarification.
The entry is created on site with date, time, name and photo. The date of receipt is the only field that cannot be reconstructed afterwards.
Quantities and prices from the stored costing, mark-ups by the same rule as the main order. The quotation goes out in text form and is filed on the case.
The case shows how many days have passed since receipt. A reminder before the deadline expires replaces the calendar in the site manager's head.
If agreement is reached, the price is confirmed and the status set. If the instruction arrives in text form, it is filed on the variation - it is the basis for carrying out the work.
If the amount stays in dispute, the permissible share is included in the next interim payment and noted on the case. The dispute then moves out of the cash position and into clarification.
The clock is not an end in itself. It prevents the state that costs most on a building site: carried out, never ordered. Anyone starting work without agreement and without an instruction works at their own risk and has to prove later what was demanded. A case with time stamps is the difference between a file and a memory. How approvals and sign-offs can be modelled cleanly in the first place is set out in digitising approval workflows.
A final account that needs no rework
At the end stands the final account, and that is where the quality of the three preceding stages shows. The remuneration falls due once the client has accepted the work and the contractor has issued a final account that can be checked. It can be checked if it contains a clear statement of the work performed and is traceable for the client (section 650g paragraph 4 sentence 2 German Civil Code). And it counts as checkable if the client has not raised substantiated objections within 30 days (section 650g paragraph 4 sentence 3 German Civil Code) of receipt.
| Aspect | Variation as its own case | Variation as a note |
|---|---|---|
| Start of the clock | Receipt of the request is recorded with a date | Nobody knows when the deadline began |
| Quotation | Dated, numbered, demonstrably delivered | Agreed verbally, disputed later |
| Interim payment (section 650c) | 80 per cent of the disputed amount possible | Nothing can be included, because no quotation exists |
| Evidence | Photos and measurements sit on the case | Search through phone and mailbox |
| Final account | Items are carried over | Items are reconstructed |
| Dispute | The history can be evidenced with dates | One account against another |
The practical lever sits in the word statement. A final account built from the same items as the interim payments is traceable for the client, because every line has already been seen once. A final account rebuilt in the office almost always deviates somewhere - and a single deviation is enough for a substantiated objection. So the same rule applies to the final account as to the order: carry over rather than re-enter.
Where connecting systems saves time
Three connections carry most of the benefit. The first runs from site measurement into the stage of completion: whoever measures on site writes into the very record the statement is later built from. The second runs from time recording into the variation, so that hours for changed work do not disappear into the main order. The third runs from the invoice into the accounts, so that open interim payments, retentions and incoming payments are visible without a second round of data entry. Which routes are technically available for that is described on the integrations page.
Outgoing invoicing is the point where two projects meet. A company touching this chain anyway should bring the invoicing route onto the format that becomes mandatory in stages from 2027 - the effort is then carried once rather than twice. What to watch out for is set out in the e-invoicing mandate from 2027. The same principle applies in reverse on the incoming side, there with purchase order, delivery note and invoice; how that comparison runs is shown in automated invoice checks.
Security and default: two figures from contract law
Contract drafting itself has a boundary that can be held in the master data as well. An agreement under which payment may only be demanded more than 60 days (section 271a paragraph 1 sentence 1 German Civil Code) after receipt of the consideration is only effective if it is expressly made and is not grossly unfair. A company that stores payment terms per client can see at a glance which contracts sit above the usual range. What follows from that is a commercial decision; the legal assessment belongs in professional review.
Starting in six steps
Getting started does not require a full programme. One live project with a manageable bill of quantities is enough to walk the chain once from end to end and see the gaps. The following six steps make sense in this order, because each builds on the one before.
- Pick one project and set up the items from the bill of quantities properly once. Everything else hangs off that; without item numbers, every later evaluation stays manual.
- Introduce the stage of completion as a data record with a cut-off date and capture delivered quantities where they arise. Typical workflows and terms for the sector are described under processes in the trades.
- Create the variation as a case type of its own: number, date of receipt, person instructing, reference to the item, status, attachments. Three mandatory fields beat twelve nobody fills in.
- Generate the interim invoice from the stage of completion rather than from a template. The statement then appears by itself, because it uses the same lines.
- Make deadlines visible: days since receipt per variation, days since receipt of the final account, open interim payments by age. A small piece of automation is enough for that, it only has to run reliably.
- Only then connect systems: measurement, time recording and accounts, in that order. Putting an interface on top of a disorderly workflow only speeds up the disorder.
Two things expressly do not belong in the first pass: replacing the existing software, and a rule book for special cases. Both hold the company up for weeks before any benefit becomes visible. The normal case first, the special case later - and on the project that is running right now.
One building project is enough as a basis
What can be measured afterwards
Once the chain is in place, it can be steered. Five figures are enough, and all five come from fields that are maintained anyway - so they cost no additional data entry.
- Days from stage of completion to interim invoice, measured per project. That is the part of the pre-financing the company steers itself.
- Share of variations with a dated quotation out of all variations. This ratio decides what can be included in an interim payment at all.
- Days from receipt of the change request to the variation quotation going out. A long stretch here gives away the deadline the law provides.
- Reduced items per interim invoice, with the reason. The most frequent reasons show which field is missing from the stage of completion.
- Outstanding receivables by age band, split into interim payments, final accounts and retentions. Which metrics actually help a mid-size company and which merely create work is set out in metrics that actually help.
The most expensive variation is not the one that was declined, but the one that was never written. It was carried out and never paid for, and no file records who asked for it or when.
These figures also work internally. Being able to show a site manager how many of their variations carry a quotation, compared with the neighbouring project, leads to a different conversation than the instruction to work more carefully. The same applies to planning the crew: checking assignments against qualifications and rest periods while the roster is drafted, rather than correcting them afterwards, means fewer corrections in payroll and billing - described in shift rosters that check rest periods upfront. And where payment still fails to arrive, an orderly chain of reminders and formal notices takes over, as described in automated dunning.
Sources and legal basis
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