A common way to pay contractors on private projects in Pakistan is by round-figure instalments: a lump sum at the start, another "when the roof is done", more when the contractor asks. It feels simple. It also means the client has no clear way to know whether the money paid matches the work done.
Interim payment certificates, or IPCs, solve this. They are standard on commercial and government projects and just as useful on a private house.
What an IPC Is
An IPC is a document, usually prepared or checked by the architect or quantity surveyor, that certifies how much the contractor should be paid at a given point. It is based on measured work completed against the BOQ, not on the contractor's estimate or the calendar.
Ofivio's guide to what an interim payment certificate is walks through a full example if you want to see one line by line.
How an IPC Is Calculated
A typical IPC contains:
- Work completed to date: Measured quantities of each BOQ item, multiplied by the agreed rates.
- Approved variations: Changes that were priced and approved in writing.
- Materials on site: Sometimes included, at an agreed percentage, for materials delivered but not yet used.
- Less retention: A percentage held back until completion and the defects period.
- Less advances recovered: Any mobilisation advance is deducted gradually.
- Less previous payments: What was already paid in earlier certificates.
The result is the amount due now. Because each certificate is cumulative, errors in one certificate are corrected in the next.
Why Retention Matters
Retention is money held back from each payment, usually a small percentage, and released after completion and the defects liability period. It gives the contractor a reason to return and fix defects after handover. Without retention, a client who finds leaking bathrooms after moving in has little leverage.
Measure, Then Pay
The discipline is simple: measure the work, check it against the BOQ, certify, then pay. Measurement can be done jointly by the site engineer and the contractor's representative so both agree on quantities. Disputes are then about small differences, not about whether half the payment was justified.
This depends on having a proper BOQ from the start. We explained why in how to read a BOQ before you sign.
Keeping the Money Trail Clear
Over a project lasting eighteen months or more, there may be a dozen or more certificates, variations, advances and retention releases. Keeping these in spreadsheets works until someone edits the wrong version. Construction platforms such as Ofivio Build keep BOQ, measurements, certificates and payments linked, and construction accounting needs that link to show whether a project is actually making or losing money.
What Clients Should Ask For
- A BOQ-based contract: Without it, there is nothing to measure against.
- Certified payments only: No payment without a certificate from the architect or QS.
- Retention in the contract: Agreed percentage and release conditions.
- A payment record: A running statement of certified and paid amounts.
Conclusion
Pay for work done, measured and certified. It protects clients from overpayment and gives honest contractors a clear, fair basis for every invoice. Our project management service includes measurement and certification throughout construction.
