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There are often "Pay When Paid" clauses contained in the subcontracts between primes and subcontractors. Typically, a pay when paid clause is simply a timing mechanism (i.e., that the prime contractor will pay the subcontractor within X days of receiving payment from the customer) and generally will not excuse the prime contractor from having a payment obligation to the subcontractor.

How can we define a process within Unanet Financials so that we only pay a subcontractor once our customer has paid us?


There are a couple of options here.

  • Option 1: Place the relevant Pay When Paid vendor invoices "On Hold." Then, as customer payments are received, you can run a list of the invoices on hold and release the ones you have been paid for. Note that by default, the search criteria on the Search tab excludes On Hold vendors when creating the bulk vendor creation. In the Search tab of the Bulk Vendor Payment screen, you must choose to show the On Hold payments in Payment Hold Options.

  • Option 2: Create a separate Payment Term called "PWP" for Pay When Paid. To reduce the likelihood of paying the vendor before customer payment is received, the number of days in the PWP Payment Term should be set to some extended number, such as 90 days. The voucher can be paid sooner than 90 days, whenever payment from the customer is received.  

Both options require you to track which subcontractor invoices should be paid.

Additional Information

KC - Payment Terms

KC - AP Admin Guide - Vendor Invoice Entry

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