Practical guide
How to manage states of progress (SAL) for works
The state of progress, often abbreviated in Italian as SAL, is the document that certifies the share of works carried out up to a certain moment and justifies a partial payment to the contractor. In extraordinary condominium works, payment by states of progress is the method that best protects the owners, because it links the outlay to the actual progress of the site rather than to an advance. Payment by SAL also affects the special fund, which can be set up in relation to the individual payments due. This guide explains how states of progress are produced, verified and paid.
What to check at each SAL
- Match between certified works and works actually carried out
- Approval by the works supervisor of the state of progress
- Consistency with the unit prices of the specification and contract
- Application of the agreed retention money
- Availability of the special fund for the payment due
- Traceable bank transfer and the contractor's contribution compliance
1. What a state of progress is
The state of progress is an accounting snapshot of the site at a given moment. It lists the tasks carried out, measures them, applies the contract's unit prices and determines the amount accrued by the contractor up to that date, net of what has already been paid.
The works contract sets when to issue the SALs: on reaching a certain percentage of works, an amount or a phase. Linking payments to these milestones avoids advancing money to the contractor for works not yet carried out.
2. Verification by the works supervisor
The state of progress is not a self-certification by the contractor. It must be verified and approved by the works supervisor, who checks that the accounted works have actually been carried out and conform to the design and specification.
Only after this technical approval does the manager authorise payment. This step is the condominium's main safeguard: it pays for what has really been done and to a workmanlike standard, not for what the contractor claims to have done.
- The SAL measures the works carried out at contract prices
- It must be approved by the works supervisor before payment
- The manager pays only after the technical verification
3. Retention money
On each state of progress it is common practice to apply retention money, that is not paying the full accrued amount but withholding a share until acceptance. This sum remains available to the condominium to cover any defects or tasks to be completed.
The retention percentage and the release conditions must be defined in the works contract. The final balance, including retentions, is paid only after successful acceptance, when it is certain that the works have been carried out correctly.
4. SAL and the special fund
Payment by states of progress affects the special fund provided by Article 1135. The general rule requires a fund equal to the total amount of the works, but when the contract provides for staggered payments based on the states of progress, the fund can be set up in relation to the individual payments due.
For the manager this means being able to request sums from the owners in stages, in parallel with the SAL deadlines. It is essential that the fund is always sufficient for the imminent payment, so as not to have to pay the contractor without available cash.
5. Track SALs in the software
Each state of progress generates a deadline towards the contractor and, upstream, a request for payment from the owners to fund the special fund. Keeping these two flows aligned is the most delicate part of the site's financial management.
With software such as AmministraPro the manager links each SAL to the condominium and the work, schedules the payment to the contractor by traceable bank transfer and generates the special fund instalments in relation to the payments due, keeping the history available. The features are described on the funzioni page, the plans on the prezzi page.
Frequently asked questions
What does payment by states of progress mean?
It means the contractor is paid in several tranches, each corresponding to the share of works carried out and certified up to that point. It is the alternative to advance payment and protects the condominium, because it links the outlay to the real progress of the site.
Who approves the state of progress?
The state of progress is verified and approved by the works supervisor, who checks that the accounted works have actually been carried out and conform. Only after this technical approval does the manager authorise the corresponding payment to the contractor.
What is retention money for?
Retention money is a share not paid on each SAL, withheld until acceptance. It serves to cover any defects or tasks to be completed. It is released with the final balance, after acceptance has ascertained the correct execution of the works.
Does the special fund change with SAL payments?
Yes. The general rule of Article 1135 requires a fund equal to the amount of the works, but if the contract provides for payments by states of progress the fund can be set up in relation to the individual payments due, with requests to the owners staggered over time.
How are SALs paid to the contractor?
Payment is made after the works supervisor's approval, usually by traceable bank transfer when the works give a right to tax deductions, checking the contractor's contribution compliance and applying any retention money provided in the contract.
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