Bill by pay application (AIA G702 / G703)
Monthly progress billing against a schedule of values, with retainage and a G702/G703 PDF.
On commercial jobs you bill in monthly draws against a schedule of values (SOV), and the bank funds each one. The Pay Apps tab handles that AIA-style, in both directions: you bill the owner/bank, or a sub bills you. The tab only shows when the project's billing method is set to Progress billing (AIA) - pick that when you create the job, or change it from the Projects list edit.
- 1Open the project and go to the Pay Apps tab (under Finance).
- 2Click New Application. Choose "We bill the owner" (uses the whole budget as the SOV) or "A sub bills us" (uses that sub's scope). Set the period-ending date and retainage %.
- 3The SOV lines fill in, with "previously billed" carried forward from earlier applications automatically.
- 4Enter this period's work (and any stored materials) per line. The G702 summary updates: completed to date, retainage held, and current payment due.
- 5Move it through Draft, Submitted, Certified, Funded as the bank/architect processes it.
- 6Use "G702 / G703 PDF" to print the Application and Certificate for Payment plus the continuation sheet to submit.
WHAT IS CHECKED BEFORE IT GOES OUT. Retainage has to be between 0 and 100% - you cannot hold back more than has been earned. Each line has to stay between nothing and its scheduled value, so a line cannot be billed past 100% or below zero. If a line genuinely needs more, raise a change order to increase its scheduled value first.
A draft can hold a line that is over - useful while you are sorting out the change order. Submit, Certify and Fund will not go through until it is resolved, and the reason shows next to the button. In that message, "change order" is a link: it opens the Change Orders screen with the overage and the right budget line already filled in, so you do not have to work the number out again.
CHANGE ORDERS AND THE SCHEDULE OF VALUES. The SOV is your budget line items plus every approved change order. One raised against a budget line increases that line's scheduled value; an owner-side one that names no line gets a row of its own, called "Approved change orders", so there is somewhere to bill it from. Either way the contract sum on the G702 includes it.
This works the same on a subcontractor application as on one you send the owner. A draft is built from the schedule as it stood when you created it. If a change order is approved afterwards, the draft says so - "$50,000 of approved change orders is not on this schedule yet" - with a button to bring it in. It only raises scheduled values and adds the change-order row; anything you have already entered for this period is left alone. Certified and funded applications are never changed, because they are the record of what was sent.
The schedule of values is your budget line items, so build the budget first.