What is a split payment?

 General Availability in Select Markets (United States)

flag-us.png Procore Pay is available in the United States. It is designed for General Contractors and Owner-Builders who act as their own General Contractors on a job. Procore Pay extends the Invoice Management functionality in the Procore web application to handle the payment process between general and specialty contractors.

Background

With Procore's Invoice Management tools, you can record split payments or joint checks.

Answer

A split payment divides a single and full amount due into multiple parts. To settle the amount due, one or more payment methods are typically used (i.e., cash, check, wire transfer, credit card).

About Split Payments

When issuing split payments, it's important to know how to record them in Procore's Invoice Management tools.

What is a split payment?

A split payment divides the total amount due into multiple parts. To settle the total amount due, the payor(s) issue more than one payment using different payment methods to one or more payees (for example, cash, check, wire transfer, credit card, and so on). With Procore's Invoice Management tools, you can record split payments or joint checks.

Example

Examples of split payments include:

  • The full amount due is split into multiple single payments contributed by one (1) payor to one (1) payee. For example, the full amount due on an invoice payment of $10,000.00 could be split into one (1) cash payment for $2,000.00, one (1) check for $3,000.00, and one (1) ACH wire transfer for $5,000.00.

  • The full amount due is split into multiple single payments contributed by one (1) payor to two (2) or more payees. For example, the full amount due on an invoice payment of $10,000.00 could be split into one (1) ACH wire transfer for $7,000.00 to the first-tier contractor and one (1) $3,000.00 joint check to the first-tier and sub-tier subcontractor.

  • The full amount due is split into multiple single payments jointly contributed by two (2) or more payors to one (1) or more payees. For example, the full amount due on an invoice payment of $10,000.00 could be split into one (1) Procore Pay payment of $6,000.00 from one (1) payor to the first-tier subcontractor and one (1) $4,000.00 check from another payor (i.e., an alternate funding source) to either one (1) or more than one (<1) payee.

How do I record split payments in Procore?

General contractors issuing split payments in Procore Pay can cut one (1) check for the amount due to the sub-tier subcontractor and record it in the 'Payments Issued' tab of a commitment. For instructions, see Add a New Payment to the Payments Issued Tab. The other part of the split payment is processed as an invoice payment to the first-tier subcontractor with Procore Pay.

For Procore Pay users, the 'Amount' added for the new check payment to the sub-tier subcontractor immediately updates these fields on the corresponding subcontractor invoice in the Company level Payments tool:

These updates ensure that Payments Disbursers view accurate invoice data for the first-tier subcontractor. It also allows disbursers to verify invoice payment orders before authorizing a disbursement. See Authorize Disbursements.

Example

You are a general contractor who received a subcontractor invoice from a first-tier subcontractor for $100,000.00. However, you must pay a portion of that amount due (i.e., $25,000.00) as a joint check to the first-tier and sub-tier subcontractor. You must also pay the balance to the first-tier subcontractor by processing an invoice payment with Procore Pay.

  1. Write a handwritten check or cut a company check with your integrated ERP system. This check pays the sub-tier subcontractor $25,000.00.

  2. Log the $25,000.00 payment in the 'Payments Issued' tab of the first-tier subcontractor's commitment. See Add a New Payment to the Payments Issued Tab of a Commitment.

  3. A Payments Disburser with invoice administrator permissions can view the subcontractor invoice in the Company level Payments tool.

  4. A Payments Disburser can then add the first-tier subcontractor's invoice when creating a disbursement to process an invoice payment order for the $75,000.00 balance. See Create Disbursements.

CAN I RECORD OTHER PAYMENT OPTIONS BESIDES JOINT CHECKS IN PROCORE?

Yes. Procore's Invoice Management tools allow invoice administrators to record joint payments and joint checks. To learn more, see What are joint payments and joint checks?

See Also

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