What Is a Contractor Extract (Mustakhlas)?
What a contractor extract is, interim vs final extracts, and how to group completed work orders, deduct fines and add 15% VAT for a correct invoice total.
Quick answer
A contractor extract (mustakhlas) is the payment claim a contractor submits to the employer for work completed and approved in a given period, after deducting fines and adding VAT. On utility work-order contracts it is built from completed work orders that each carry an achievement certificate, and it stays pending until an approval date is recorded. This guide explains its parts and the calculation, with an illustrative example.
Key takeaways
- An extract claims the value of completed, approved work; achievement certificates are its foundation.
- Interim extracts are submitted periodically during execution; a final extract closes the contract’s account.
- Calculation order in ELX: certificate value minus fine gives the net, VAT is applied to the net, and the two add up to the invoice total.
- Many payment delays start before finance: an incomplete certificate, an open quality remark, a missing document.
- ELX pulls work orders that have certificates into the extract with their values, calculates net and VAT, and archives the orders once the extract is approved.
- An extract does not replace an e-invoice, and ELX does not issue e-invoices or connect to FATOORA.
In this article
A contractor extract is how finished site work turns into money owed to the contractor. On work-order contracts, every order that is executed, passes quality and receives an achievement certificate becomes a billable value, and the extract gathers those values into one documented claim. This guide covers the definition, interim versus final extracts, what an extract contains, a worked calculation and how ELX handles the process.
What is a contractor extract?
A contractor extract (Arabic: mustakhlas) is a financial claim the contractor submits to the employer for work that was completed and approved during a given period. It shows what was done and at which quantities and prices, what is deducted (fines, for example) and what is added (VAT), and it ends with the total amount due.
For electricity-network contractors on utility work orders, an extract is not tied to one project’s percentage completion. It is built from a batch of completed work orders under one contract, each with an achievement certificate that fixes its value, so the extract moves only as fast, and is only as accurate, as the orders feeding it.
- Extract (mustakhlas)
- The contractor’s claim for the value of completed, approved work, after deductions and tax.
- Progress billing
- The common English term for claiming payment in stages as the work advances.
- Interim Payment Certificate (IPC)
- Under FIDIC contracts, the contractor submits a Statement with supporting documents to the Engineer, and the amount due is set out in an Interim Payment Certificate that the employer then pays.
- Achievement certificate
- A per-work-order document confirming executed items, quantities and prices; it sets the value the order carries into the extract.
Interim vs final extract: what is the difference?
Interim (running) extracts are submitted periodically while the contract is live, each covering the work completed since the previous one. A final extract comes after the works finish and settles the contract’s final account: what was paid, what is still due, and any agreed adjustments.
| Aspect | Interim extract | Final extract |
|---|---|---|
| Timing | Periodic during execution, monthly or per the contract’s payment schedule | Once, after the works are complete |
| Scope | Work completed in the period | All work under the contract |
| Purpose | Keep execution funded | Close the account and settle differences |
| Basis of value | Quantities approved in the period | Final approved quantities for the whole contract |
| What follows | Another interim extract, or the final one | The contract’s financial account is closed on its terms |
How ELX treats this distinction
ELX has no separate “final extract” type. Every extract groups work orders that have achievement certificates and is approved by recording its accreditation date. Whether a claim is interim or final is set by your contract.
What does an extract contain?
Formats vary from one employer to the next, but most extracts share the same core elements. The table lists them in the order a reviewer reads them, with where each one comes from in the work-order journey.
| Element | What it means | Where it comes from |
|---|---|---|
| Extract number | Unique reference quoted in all correspondence | The contractor |
| PO number | The employer’s purchase order it is paid against | The employer |
| Preparation date | When the extract was prepared | At preparation |
| Contract | The contract being billed, with its own items and prices | The contract and its priced schedule of items |
| Work description | The type of work covered by the claim | The work orders |
| Certificate values | Each order’s value: executed quantity × contract price | Each order’s achievement certificate |
| Fines | Deductions on a specific order under the contract, such as delay fines | Contract terms and the employer |
| Net value | Certificate value minus the fine | Calculated |
| VAT | Tax on the taxable value; in ELX, the net value | The rate in force: 15% since 1 July 2020 |
| Invoice total | Net value plus VAT | Calculated |
| Approval date | When the extract is approved | The approval procedure set out in the contract |
| Attachments | Certificates and supporting documents | Work-order and extract files |
The more of these values flow from their source record instead of being retyped, the fewer transcription errors reach the employer’s reviewer.
How are fines and VAT calculated? A worked example
The arithmetic is simple; the real work is getting the inputs right. The example below follows the order ELX uses: start with each order’s certificate value, deduct any fine to get the net value, apply VAT to the net, and add the two to reach the invoice total. Whether a fine actually reduces the taxable amount in your case is a tax question, settled by your contract and ZATCA’s rules.
Add up the certificate values
For each work order in the extract, take its confirmed certificate value: executed quantity multiplied by price, item by item.
Deduct the fine
Record the fine against its order. Net value is the certificate value minus that fine.
Apply VAT
Multiply the net value by the VAT rate. Saudi Arabia’s standard rate has been 15% since 1 July 2020, according to ZATCA.
Total it
Each order’s invoice total is net plus VAT; the extract total is the sum of those.
| Work order | Certificate value | Fine | Net value | VAT 15% | Invoice total |
|---|---|---|---|---|---|
| Order A | 45,000 | 0 | 45,000 | 6,750 | 51,750 |
| Order B | 35,000 | 2,000 | 33,000 | 4,950 | 37,950 |
| Order C | 20,000 | 0 | 20,000 | 3,000 | 23,000 |
| Total | 100,000 | 2,000 | 98,000 | 14,700 | 112,700 |
The result: SAR 100,000 in certificates, a SAR 2,000 fine, SAR 98,000 net, SAR 14,700 VAT and a SAR 112,700 invoice total. The order of the steps changes the VAT itself: charged on the gross SAR 100,000 before the fine, it would have been SAR 15,000 rather than SAR 14,700, which is why the tax treatment of fines should be settled before you adopt a template.
Illustrative only
These figures are hypothetical and only show the method. ELX calculates VAT on the net after the fine, but this guide does not settle whether a delay fine reduces the taxable amount under ZATCA’s rules. That depends on your contract and the nature of the fine, so confirm it with your tax adviser before adopting a template.
How does the extract relate to the achievement certificate?
The achievement certificate is the foundation of the extract. It is prepared for each work order once quality passes, lists the executed items with quantities and contract prices, and produces the order’s total value. The extract re-prices nothing; it collects existing certificate values and applies deductions and tax.
- Achievement certificate: one per work order, proving what was executed and its value.
- Extract: one claim grouping several orders under a contract, with net, VAT and total.
- Approval: the certificate is confirmed within the work-order journey; the extract is approved under the contract’s procedure and given an accreditation date.
In practice, a wrong quantity on a certificate travels straight into the extract, so check quantities on the certificate before grouping, not after. In ELX, users with edit rights on certificates can change an item’s executed quantity from the work-order report, and the certificate total is recalculated automatically.
For a full comparison of the two documents, read achievement certificate vs extract.
Why are extract payments delayed, and how do you reduce the causes?
Late payment often begins before the extract reaches finance: a work order whose execution was never closed, an open quality remark, a certificate missing attachments, or a wrong PO number. Each one sends the extract back a step.
Contracts set their own payment windows. Under FIDIC 1999, for example, Sub-Clause 14.7 gives the employer 56 days, from the Engineer’s receipt of the contractor’s Statement and supporting documents, to pay the amount due under each Interim Payment Certificate. If payment is late, Sub-Clause 14.8 entitles the contractor to financing charges compounded monthly on the unpaid amount. These terms apply only where your contract is based on FIDIC. And because the 56 days run from receipt of the Statement and its supporting documents, missing paperwork can push back the start of the clock itself.
On government contracts, contractors file their financial claims with public entities through Etimad, the Ministry of Finance’s procurement platform. On 5 August 2026 the Ministry announced that the Cabinet had approved a new Government Tenders and Procurement Law, which requires private-sector dues to be processed on time before a government entity takes on new contractual commitments. The announcement gave no effective date.
Before submitting any extract, run through this list:
- Every work order in the extract has a complete achievement certificate with quantities and prices.
- No quality remarks are open on the orders included.
- The PO number and contract number match the employer’s documents.
- Each fine is recorded against its own order, with its supporting reference.
- The VAT rate used is the one currently in force, and fines are treated for tax the way your tax adviser confirmed.
- Supporting attachments are uploaded: certificates, drawing files and whatever the employer requires.
- The preparation date is recorded, and someone owns follow-up on the approval date.
Because part of the delay builds up in earlier stages, stage time limits help surface stuck orders before they miss the extract. See the guide to work order time limits and delay justifications.
How is an extract prepared in ELX?
ELX is a bilingual cloud (SaaS) system, hosted and operated by Matrix and used from the browser, so the contractor needs no servers of its own. It carries each work order from registration to archive, and extracts are the last stage before the archive. After quality, the achievement certificate and drawing, the order reaches extracts with its stored certificate value and a recorded transfer date, so nobody retypes figures. See extracts and achievement certificates.
Create the extract
Record the extract number, PO number, preparation date and notes.
Choose the contract and work description
The system imports the matching work orders that have achievement certificates, with their values.
Enter fines
Enter a fine per order where one applies. The system calculates net value, VAT on the net at the rate in settings, each order’s invoice total and the overall total.
Attach the files
Attach the extract’s files so the claim’s supporting documents stay with the extract itself.
Save, then approve
The extract is saved as pending. Once an accreditation date is entered it is approved, and its work orders move to the archive automatically.
The VAT rate is set once in the general settings, part of permissions, settings and master data, where each user’s rights on every screen (show, add, update, delete) are also managed. Each contract in the contracts guide keeps its own item list and prices, so certificates are valued at their own contract’s prices.
For follow-up, the dashboard shows pending versus approved extracts. For a date range, the extracts register lists each extract’s number, contract number, PO number, preparation date, approval date, fine and invoice total, and prints from the report viewer. The execution register shows each work order’s certificate confirmation date and values next to its extract and contract numbers, so you can see where each order stands financially.
What ELX does not do: issue e-invoices or connect to FATOORA, submit extracts to Etimad or connect to it, or replace your accounting software. It is a specialised operations system for utility work orders.
See how an extract is prepared in ELX
We show how the extract pulls in orders that have certificates, with their values, calculates net value, VAT and invoice total, and archives them on approval.
Does an extract replace an e-invoice?
No. An extract is a contractual claim establishing what the contractor is owed, while a tax invoice is a regulated document governed by ZATCA’s e-invoicing rules. The figures may match, but each serves a different purpose under different rules.
Phase 2 of e-invoicing, the Integration phase that connects taxpayers’ solutions to ZATCA’s FATOORA platform, started on 1 January 2023 and rolls out in waves of targeted taxpayer groups, each notified at least six months ahead. The tax invoice itself comes from your company’s e-invoicing solution, while the extract in ELX remains the operational record of certificate values, fines, VAT and invoice totals per order.
For phases and requirements, read the ZATCA e-invoicing guide for contractors. To see the extract workflow from certificate to approval on a live screen, request a demo.
Want to see ELX on your own projects?
Request a demo from our team on WhatsApp and see how work orders, extracts and warehouses run in one system.
Frequently asked questions
What is a contractor extract?
A contractor extract, or mustakhlas, is a payment claim the contractor submits to the employer for work completed and approved in a given period. It carries the extract number, PO number, contract and the value of completed work, then deducts fines and adds VAT to reach the invoice total. On utility work-order contracts, its value comes from the achievement certificates of completed work orders.
How is VAT calculated on an extract?
Multiply the taxable value by the rate in force; Saudi Arabia’s standard rate has been 15% since 1 July 2020. ELX calculates VAT on each order’s net value, meaning the certificate value after any fine, at the rate set in its general settings. In an illustrative case, SAR 98,000 net attracts SAR 14,700 of VAT, for a SAR 112,700 invoice total. Whether a fine reduces the taxable value is for your tax adviser to confirm.
How are fines deducted from an extract?
In ELX, a fine is entered inside the extract against the work order it relates to and subtracted from that order’s certificate value before VAT is calculated; the system then works out net value, VAT and invoice total automatically. The contract and the employer decide the reason and the amount, not the system. Whether a fine reduces the taxable value is a question for your tax adviser before you settle on the method.
Can several work orders go into one extract?
Yes, and on work-order contracts that is the norm: one extract groups several completed orders under a single contract. In ELX, the user picks a contract and a work description, and the system imports the matching work orders that have achievement certificates, with their values. A fine can then be entered per order, and the system calculates each order’s net value, VAT and invoice total plus the overall total, with the extract’s files attached.
When is an extract considered approved?
An extract is approved when the employer accepts it under the contract’s procedure. In ELX, an extract stays pending until its accreditation date is entered; at that point it becomes approved and the work orders it contains move to the archive automatically. The dashboard shows pending versus approved extracts, so the team can see what is still waiting for approval.