How to Settle a Subcontractor Final Account
Recording the agreed final payment to a subcontractor after all work, variations, and disputes are resolved.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Work-in-Progress (WIP — Subcontract) | Asset (+) | 15,000.00 | - |
| Accounts Payable (Subcontractor) | Liability (+) | - | 15,000.00 |
💡 Accountant's Note
The final account may include agreed variations not previously certified. Any additional cost above what was already accrued is added to WIP in the period the settlement is agreed.
Practitioner & Systems Framework
💻 ERP Architecture
Process the final AP invoice and ensure the PO/Contract status in the ERP is marked 'Closed'. Ensure all retentions are accounted for and no further accruals roll forward.
⚠️ Audit Flags
Auditors reconcile the total payments made over the life of the subcontract against the signed Final Account statement to ensure completeness of costs.
📄 Required Documentation
Subcontractor Final Account Statement (signed by both parties), final variation orders, and 'No Further Claims' declaration from the subcontractor.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.