After approval of the presented quotation, the following steps are taken:

1. Recording contract data and printing it.

2. Issuing an advance payment guarantee letter.

3. Providing a final payment guarantee letter.

4. Receiving the advance payment.

5. Receiving the site and analytical drawings for the project.

Upon receiving the advance payment, an advance payment guarantee letter is provided, and this may require enhancing the previously presented guarantee letter during tendering. Often, a fixed percentage, for example, 10% of the contract value, is required as security.

Receiving the Advance Payment:

The advance payment is a cash amount received at the beginning of the contract in exchange for providing an advance payment guarantee letter. This allows the contractor to commence execution and incur expenses. The advance payment is deducted at a percentage in the progress payments. A cash/cheque receipt is generated (linked to the receipts program), and the advance payment is automatically loaded onto the receipt, resulting in the creation of a specific accounting entry.

Contract Discounts and Additions:

Discounts (Deductions):

• Reinstatements: Deductions that are reimbursed upon final project delivery, serving as security for the work performed.

• Withholdings: Non-refundable deductions forwarded to official authorities, such as sales and business profit taxes and social insurance.

Penalties:

• Penalties are non-refundable deductions and serve as a reduction in the amounts to be disbursed. These include fines for late project delivery, failure to maintain safety on-site, and any other fines incurred in a similar manner.

Additions :

• Contractor stock, treated as a trust in contracting companies, is accounted for in each progress payment on-site and is added to the value of the progress payment.

Contracting with the Client and Commencing Operations: