Definition
AIA billing is a construction progress billing method that uses the American Institute of Architects forms G702 and G703 to request payment. G702 summarizes the contract sum, work completed, retainage, and amount due; G703 lists each line of the schedule of values with the percentage completed to date.
Also called: AIA G702, AIA G703, G702/G703, Pay application, Payment application
AIA billing in practice
Instead of a regular invoice, the contractor submits a pay application each period. G703, the continuation sheet, shows for every line in the schedule of values the scheduled value, work completed in previous periods, work this period, materials stored, total completed, percentage, and balance to finish.
G702, the application and certificate for payment, totals those figures, subtracts retainage and previous payments, and shows the current payment due. The architect or owner's representative certifies the application before the owner pays.
Pay applications are often due on a set day each month and typically travel with lien waivers. Missing the submission date can push payment back a full cycle.
Example
A drywall subcontractor with a $200,000 contract completes 30 percent of work this month, bringing the total to 55 percent. Its G702 shows $110,000 completed, less $11,000 retainage (10 percent) and $45,000 previously paid, for $54,000 due.
Frequently Asked Questions
Do I have to use AIA forms for progress billing?
Only if your contract requires them. AIA forms are common on commercial projects. Residential and smaller jobs often use ordinary progress invoices that show the same information.
What is the difference between G702 and G703?
G702 is the one-page summary and certificate for payment. G703 is the continuation sheet with the line-by-line detail from the schedule of values.
Related terms
- Schedule of values A schedule of values is an itemized breakdown of a construction contract's total price into individual parts of the work, each with its own dollar value.
- Progress invoice A progress invoice bills a portion of a larger project as work is completed, rather than one invoice at the end.
- Retention Retention, or retainage, is a percentage of each progress payment, commonly 5 to 10 percent, that a client withholds until a project is fully complete and accepted.
- Lien waiver A lien waiver is a document in which a contractor, subcontractor, or supplier gives up its right to file a mechanics lien on a property for a specific payment.
- Change order A change order is a documented agreement to modify the original scope of work, including the effect on price and timeline.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.