If you do commercial construction work, you'll encounter AIA billing. The American Institute of Architects' standard forms G702 and G703 are the industry standard for progress payment applications on commercial projects. Understanding how to prepare these documents correctly is essential for getting paid on time.
What Are AIA G702 and G703?
The AIA G702 is the Application and Certificate for Payment. It's a summary document showing the total contract amount, work completed to date, retainage, and the current amount due. The G703 is the Continuation Sheet, which provides a detailed breakdown of the schedule of values, the percentage of each line item completed, and the amounts billed in each period.
Together, these documents give the GC and owner a clear picture of project progress and payment obligations.
Setting Up Your Schedule of Values
The schedule of values is the backbone of AIA billing. You establish it at the beginning of the project by breaking your contract amount into individual line items that represent distinct portions of the work. Each line item gets a value that represents the cost of that portion.
Your schedule of values should be detailed enough to accurately reflect progress but not so granular that it becomes unmanageable. A good rule of thumb is 15-30 line items for most subcontracts. Front-loading your schedule of values (putting more value in early activities) is a common practice to improve cash flow, but GCs and owners know this trick. Keep it reasonable.
Preparing Your Monthly Application
Each month, you update the percentage complete for each line item. The form calculates the value of work completed, the value previously billed, and the current billing amount. Retainage is deducted from the total, giving you the current amount due.
Key rules to follow: never bill for more than the actual percentage complete, keep your percentages consistent with visible progress on the project, and submit on time according to the billing schedule. Late submissions often get pushed to the next billing cycle, costing you a month of cash flow.
Common AIA Billing Mistakes
Overbilling relative to actual progress is the fastest way to lose credibility with the GC and owner. Mathematical errors on the forms create delays and back-and-forth. Missing the submission deadline pushes your billing to the next cycle. Not tracking stored materials properly leads to discrepancies.
Technology for AIA Billing
Modern AIA billing tools automate the math, track your schedule of values, calculate retainage, and generate compliant G702 and G703 documents. This eliminates arithmetic errors and saves hours of manual form preparation each month.