How to fill out an AIA payment application

AIA form G702 and AIA form G703 explained

The AIA payment application is a familiar struggle for many contractors and subcontractors. Although they are a vital part of your work, the stress and headache of calculating each line precisely and submitting an AIA billing form in a timely manner can become a full time job in itself. Here’s how you can become an expert in AIA billing, and take back your days – and nights – from spreadsheets and paperwork.

What exactly are AIA forms G702 and G703?

The AIA form G702 – Application and Certificate for Payment and AIA form G703 – Continuation Sheet(s) were designed by the American Institute of Architects to protect the interests of all parties involved within a construction or contracting project. The main purpose of these forms is to help reduce errors in billing and provide the supporting documentation needed for contractors and subcontractors to receive payment for work by the project owner, general contractor, or architect of a project. 

Why you might use them

While the AIA payment application (also known as a pay app or progress billing) requires some additional work to complete compared to regular invoicing, it also comes with many benefits. For starters, AIA form G702 allows for contractors and subcontractors to receive payment as a project continues, rather than waiting for specific milestones or the project’s completion. This allows for a steady stream of cash coming in to help pay workers and cover costs for materials over the duration of the project. It also allows for a more manageable payment schedule for the project owners, making it more likely that those requesting payment will receive it in a timely manner.

Set yourself up for success

Before you can apply for payment, you need to gather your AIA forms G702 and G703, as well as your supplemental material. If you don’t already have access to these forms, you can request them directly from the AIA or use an AIA-style billing software to generate them for you. 

Next, you’ll need to gather your supplemental information. While every trade, company, contractor, and project may require something different, you’ll be referring back to your original contract, invoices, and change orders regularly. Keep these and any documentation, such as receipts, lien waivers, payroll reports, and supporting photos, in an easily accessible, organized location.

Helpful tip: give yourself time to stay on track

Schedule reminders not only for submitting the forms, but for completing your G702 and G703 as well. This will give you plenty of time to prepare your AIA billing form, as well as provide some cushion for potential errors to ensure your payment application is approved for the anticipated billing cycle.

Filling out the AIA payment application step-by-step

Step 1: Complete your AIA G703 continuation sheet

AIA form G703 template | AIA-style billing | Knowify

To make your AIA payment application process as smooth as possible, you’ll want to start with the continuation sheet. The information filled out on this form will be required for you to complete a number of fields on the G702. 

Part 1: Your basic project information – AIA G703

In this section, you will fill in the AIA G703 payment application number numerically (E.g. if this is for your second payment application, you’ll write 002) and the application date. From there, you can complete the period to –  the last date of the billing period covered in your application, and the architect’s project number if the owner, GC, or architect provides one.

Part 2: The continuation sheet table – AIA G703

Column A, B, C: Item number, description of work, and scheduled value

These three columns go hand-in-hand to categorize and identify the work required for different phases of the project. For each line item, you can choose to These three columns go hand-in-hand to categorize and identify the work required for different phases of the project. For each line item, you can choose to number them numerically, or opt to use the universal codes as outlined in the Construction Specification Institute’s MasterFormat Reference Guide. Either way, Columns A and B will correspond to each other, along with the scheduled value, or the amount of money required to complete each line item, of work in Column C. The value in Column C should remain consistent with the schedule of values already submitted at the start of this project.

For your first G703, the grand total for all work listed in Column C should equal the total in your original contract sum (Line 1 of your G702). After your first G702/G703 is completed, this total may vary based on change orders made throughout the project.

Helpful tip: Only fill out the grand total row on your last page

Continuation sheets can grow longer as a project continues forward, and this may require additional pages to fit all your line items onto your G703. If your continuation sheet is longer than one page, DO NOT fill out a grand total except on the last page of your G703. 
For example, if your G703 form ends up being 3 pages long, you’ll leave the grand total row blank on pages 1 and 2, and add the total of all your page columns on the third page’s grand total row.
Column D: Work completed from previous payment application

This column will be filled out based upon your prior payment application. If this is your first payment application for the project at hand, you can put $0.00 for your grand total in Column D and leave each line item blank. If you’ve completed more than one payment application for this project, you’ll find this number by totaling Columns D and E from your previous payment application.

Previous Column D + Previous Column E = Current Column D

Column E: Work completed from this period’s payment application

For Column E, you will enter the value of work completed through this pay period of the project. This should not, however, include any payments, materials stored – but not used – on site, or retainage. These totals will be coming up shortly after.

Column F: Materials presently stored

This column is where you will total the value of any materials presently stored on site, as well as any materials already purchased, but not in use yet, up to this billing period.

Column G: Total work completed and stored to date (along with percentage)

Now that you have Columns D, E, and F completed, you will add these totals to obtain the total work completed and stored to date for each line item. 

Column D + Column E + Column F = Left Hand Side of Column G

Once you have these totals for each line item to date, you will get the percentage of this work by dividing the left hand side of Column G by the value for each line item in Column C. This percentage of work completed and stored to date will go in the right hand side of Column G.

Column G Total for a Line Item / Column C for That Line Item = % Completed for Column G

Column H: Balance to finish

Balance to Finish, or Column H, is there to show you how much money you will need to complete for each line item of work. To get this total, simply subtract Column G from Column C for each line item.

Column C – Column G = Column H for Each Line Item

Column I: Retainage (if using a variable rate)

If you are using a fixed retainage rate throughout the entirety of your contracted project, then you won’t need to complete Column I of your G703. However, if a retainage rate reduces after a specific amount of work is completed for a line item or it does not apply for materials, then you will multiply by the variable retainage rate for the current pay application’s percentage of labor and materials. 

FAQ: Do I include sales taxes in G703?

“You may list tax as part of each line item on G703 or as a separate line item. Either way, the total gets included in the “Total Completed and Stored to Date” (G703 Column G) and then transferred to G702 Line 4. So it is broken down separately in G703 but not in G702.”

Step 2: Continue to your AIA G702

AIA form G702 template | AIA-style billing | Knowify

Part 1: Your basic project information – AIA G702

In this section, you will fill in the property owner’s name and address, your business name and address, the architect’s name and address (if applicable), and your project name and address.

Next, you’ll fill in the payment application number numerically (E.g. second = 002), the contract date, and project number (if applicable). These should already be specified in your original contract. From there, you can complete:

Period to –  the last date of the billing period covered in your application.

Contract for – a brief summary of the labor and/or materials you are providing.

Distribution to – a checkbox list stating who this AIA billing form will be provided to.

Part 2: Contractor’s application for payment – AIA form G702

The remainder of the AIA billing form will rely heavily on supplemental information and accurate calculations. Be sure to document your progress in case you need to revisit any sections and maintain a copy for your records. 

Helpful tip: Opt for digital tools when editing and organizing AIA forms

You’ll need easy access to your prior change orders and pay applications in order to successfully complete your current one. Make sure you keep a consistent, organized storage system for your record. 
Additionally, having an editable format will save you time and money down the road. This can be achieved either directly within the AIA contract document software or through a tool that automatically generates AIA-style documents for you.
Line 1 – Original contract sum

This line should reflect the original contract price. This figure will remain the same across future AIA payment applications, regardless of any change orders.

Line 2 – Net change by change orders

Change orders occur on nearly every project as the scope of work changes throughout the project. Due to the nature of construction projects, the number you enter on Line 2 can be either a positive or negative figure based on whether or not work deducted exceeds work added. This total will be calculated in the change order summary underneath Line 9 in the bottom left hand corner. 

Your change order summary table

The total you get in this section will be reflected in two spots: Line 2 and in the final line of this table, labeled as net change by change order. Remember, only change orders approved in writing should be calculated in this table.

In the first row of this table, you’ll add up the total figure of additional work agreed upon in previous months by the project owner, GC, or architect and place that figure under the additions column. You’ll also add up the total figure of deducted work and place that figure under the deductions column. 

Then, you’ll add up the total figure for approved change order additions and deductions for the current month. These figures will go in their respective columns underneath your first set of totals. 

Finally, total both columns and combine them to get your final net change by change order, which you will place both here and on Line 2. For example, if in Row 3 of this table you totaled $+15,000 in additions and $-20,000 in deductions, your total net changes will be $-5,000. 

Line 3 – Contract sum to date

This total is easy to calculate once you’ve completed Lines 1 and 2. You will add the total in Line 1 to the total in Line 2. Remember, Line 2 can be either a positive or a negative number, so be certain you’ve entered this accordingly.

Line 1 ± Line 2 = Line 3

Line 4 – Total completed & stored to date

Your Total Completed and Stored to Date will be the same as your grand total for Column G on your accompanying G703 form. 

Line 5 – Retainage

If you are using a fixed retainage percentage rate, you will input those values directly next to 5A (fixed rate of payment held for labor) and 5B (fixed rate of payment held for materials). For Line 5A, you will multiply the percent value by the total of completed work, or Columns D + E on your G703.

(% 5A) x (Columns D + E on G703) = Total $ for Line 5A

You will similarly do these steps for the percent of materials stored found in Column F of your G703. So, you will multiply the percent value of stored materials by the total of stored materials.

(% 5B) x (Column F on G703) = Total $ for Line 5B

Then, you will add the totals in Lines 5A and 5B to get the total sum of retainage for Line 5.

However, if you used a variable rate for retainage, your total retainage sum will equal the grand total sum of Column I on your G703.

Line 6 – Total earned less retainage

To get your total earned less retainage, subtract your total amount recorded in Line 5 from Line 4.

Line 4 – Line 5 = Line 6

Line 7 – Less previous certificates for payment

Simply fill this in with the total amount recorded on Line 6 of your previous certificate. If this is your first AIA payment application for this project, record $0.00 in this section for now.

Line 8 – Current payment due

To calculate your current payment due, subtract your Line 7 total from your Line 6 total.

Line 6 – Line 7 = Line 8

Line 9 – Balance to finish, including retainage

Finally, you’ll calculate your remaining contract balance once this current payment application is approved. This can be totaled by subtracting Line 6 from Line 3.

Line 3 – Line 6 = Line 9

Helpful tip: don’t sign without consent or notarization

Unless it is mutually agreed upon by both parties and amended in your contract, you’ll need to sign your AIA payment application in front of a notary public. Signing your documents without consent could lead to unnecessary additional steps, delaying your payment and cash flow.

Get paid without the stress

While managing a single project’s AIA payment application may be time consuming, juggling multiple projects requiring them can exhaust precious time and resources from your business, as well as increase your likelihood for errors and cash flow delays. That’s why investing in easy-to-use, AIA billing software is worthwhile. Knowify’s AIA-style billing software can reduce the time spent creating your pay apps, as well as reduce the likelihood of errors, helping you get approved for payment faster and on time.

To see how simple AIA billing could be for your business, schedule a demo with a Knowify expert or start your free trial today!

Example of an AIA G702 payment application form completed through Knowify | AIA-style invoicing