> For the complete documentation index, see [llms.txt](https://help.tahua.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.tahua.io/knowledge-base/administrator-help-guides/contracts/contract-execution-and-milestone-payments.md).

# Contract Execution & Milestone Payments

<figure><img src="/files/1hoIYH84LLS0PJyRbx30" alt=""><figcaption></figcaption></figure>

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**Stage 1 — Drafting and reviewing the contract**

1. **Admin X drafts the contract** in Tahua.
2. **Admin Y reviews the contract.** If it isn't correct, it's sent back to Admin X to be revised and the review process starts again.
3. Once the contract is approved, it's **sent to the RP (Responsible Party) to sign.**
4. **A second check occurs** after the RP signs. If anything isn't correct at this point, it's again returned to Admin X for revision.
5. Once everything looks good, **both Contract Signatories sign** the contract.
6. The **contract is marked as executed** in Tahua.

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**Stage 2 — Accepting milestones and processing payment**

Once the contract is executed, the milestone payment process can begin.

1. The **admin reviews and accepts all milestone deliverables** tied to the contract.
2. A **Payment Batch is created** in Tahua and the milestone is assigned to it.
3. The **admin exports the Batch Payment** file from Tahua.
4. **Finance imports the batch** into the banking system.
5. The **Bank processes the payments** to recipients.

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**Stage 3 — Reconciliation in Xero**

This stage runs in parallel with Stage 2 once the contract is executed.

1. A **Contact is created in Xero** for the recipient.
2. A **Bill is created for each milestone**, with the correct Tracking Option applied. See [How are Funding Categories tracked in Xero?](/knowledge-base/integrations-help-guides/xero/xero-faqs.md) for how these Tracking Options are created and kept up to date.
3. **Xero imports payment info** from Bank Feeds once the Bank has processed the payments.
4. **Finance reconciles the payment** against the Bill in Xero.
5. The **payment is recorded against the milestone** in Tahua and the process is complete.

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> **Note:** No milestone payments can be initiated until the contract has been fully executed and all milestone deliverables have been accepted by the admin.

For milestones that aren't tied to a Contract, see [Milestone Payments Using a Xero Integration](/knowledge-base/administrator-help-guides/payments/payment-integrations/milestone-payments-using-a-xero-integration.md) instead.