What Is AIA Billing? G702 and G703 Pay Applications
AIA billing is a way of requesting progress payments on a construction contract using two American Institute of Architects forms: the G702 Application and Certificate for Payment, a one-page summary, and the G703 Continuation Sheet, which breaks the contract into line items. Together they make up the pay application that the architect certifies.
Four months into a restaurant build-out, a general contractor updates each line of the G703 at month-end, carries the totals to the G702 and sends both to the architect, who checks the work and certifies what the owner should pay.
What a pay application is
A pay application, or pay app, is a contractor's formal request for a progress payment, one of the installments an owner pays as the work gets done. It usually goes out monthly and covers the whole contract to date, not just this month's work.
The G703 holds the detail: one row for each line of the schedule of values, the contractor's breakdown of the contract price into pieces of work. The G702 is the cover sheet. It totals those rows, subtracts retainage and earlier payments, and lands on one number, the current payment due. AIA's G702 instructions say to finish the G703 first and then carry the summary over.
Both forms are copyrighted and sold by AIA Contract Documents, in editions dated 1992. They assume a contractor with a direct contract with the owner, and the rules for using them sit in A201, AIA's standard set of contract terms for construction.
How the G703 continuation sheet works
Each G703 row is one line of the schedule of values, and each column answers one question about it. AIA's G703 instructions set them out like this:
- Columns A, B and C hold the item number, the description of the work and its scheduled value, the dollar amount the schedule of values gives that line.
- Column D is work completed on earlier applications, taken from columns D and E of the last one.
- Column E is work completed this period, including stored materials that have been installed since the last application.
- Column F is materials presently stored, bought for the job but not yet built into it. They stay in F until installed, even after the owner has paid for them.
- Column G is the total completed and stored to date (D plus E plus F), and G divided by C is the line's percent complete.
- Column H is the balance to finish, C minus G.
- The last column, retainage, is normally used only when the contract sets different retainage rates for different lines.
Change orders usually go at the bottom of the G703 or on their own sheet, not into the original lines. So the column C total starts at the original contract sum and moves with each approved change.
Check your contract before you bill stored material. Under A201-2017, unless the contract says otherwise, you can bill material suitably stored on site. Off-site storage needs the owner's advance approval and a location agreed in writing, and either way you must follow the owner's procedures for protecting its title to the goods.
How the G702 cover sheet works
The G702's numbered lines draw on the contract, approved change orders, the G703 and last month's form. AIA's sample G702 prints the formula next to most lines.
Lines 1 to 3 set the price. Line 1 is the original contract sum, line 2 the net change from approved construction change orders, the signed amendments that add or remove work, and line 3 adds them into the contract sum to date. A box at the bottom lists the additions and deductions behind line 2.
Line 4 is the total completed and stored to date, copied from the column G total. Line 5 is retainage, the share of each payment the owner holds back until the work is substantially complete. The form figures it in two parts: a percentage of completed work (columns D plus E) and a percentage of stored material (column F), since a contract can set a different rate for each.
Line 6 is line 4 minus total retainage. Line 7, previous certificates for payment, is line 6 from the last certificate, the figure the architect approved last time. Line 8, the current payment due, is line 6 minus line 7. Line 9 is line 3 minus line 6: what will be left to pay on the contract after this payment, retainage included.
The contractor certifies that the billed work follows the contract and that it has paid for work on earlier certificates the owner has paid. The architect certifies the amount it agrees is due.
A worked pay application
A general contractor is on application number 4 for a $1,450,000 restaurant build-out. Two change orders are approved: a $38,000 patio added two months ago, and a $5,500 credit this month after the owner chose to buy the dining room light fixtures itself. The contract holds 10% retainage on completed work and 5% on stored materials.
On the G703, work completed on earlier applications (column D) totals $612,000. Work completed this period (column E) is $188,000, which includes $24,000 of walk-in cooler panels that were stored last month and are now installed. The kitchen exhaust hood, stored on site and waiting, is the $31,000 in column F. Column G comes to $831,000, about 56% of the contract.
| G702 line | How it is figured | Amount |
|---|---|---|
| 1 Original contract sum | Signed contract | $1,450,000 |
| 2 Net change by change orders | $38,000 minus $5,500 | $32,500 |
| 3 Contract sum to date | Line 1 plus line 2 | $1,482,500 |
| 4 Total completed and stored to date | G703 column G | $831,000 |
| 5a Retainage on completed work | 10% of $800,000 (columns D plus E) | $80,000 |
| 5b Retainage on stored material | 5% of $31,000 (column F) | $1,550 |
| Total retainage | 5a plus 5b | $81,550 |
| 6 Total earned less retainage | $831,000 minus $81,550 | $749,450 |
| 7 Less previous certificates | Line 6 of application 3 | $573,600 |
| 8 Current payment due | $749,450 minus $573,600 | $175,850 |
| 9 Balance to finish, including retainage | $1,482,500 minus $749,450 | $733,050 |
Line 7 comes from last month. Application 3 showed $612,000 of completed work plus the cooler panels in storage, $636,000 in all. Retainage was $61,200 on the work and $1,200 on the panels, so its line 6 was $573,600.
Check it the other way. Total completed and stored grew by $195,000 since application 3 ($831,000 minus $636,000), and retainage grew by $19,150 ($81,550 minus $62,400). $195,000 minus $19,150 is $175,850, the same payment due. Line 9 holds up too: $651,500 of work left to bill plus $81,550 of retainage is $733,050.
Billed as stored material last month, the cooler panels add nothing to line 4 when they move to column E. Their retainage just rises from 5% to 10%, which trims $1,200 from this month's check.
Who signs off and who gets paid
The contractor signs the G702 and sends it to the architect with the G703. Under A201-2017, the application goes in at least ten days before each progress payment date, with whatever backup the owner or architect asks for, such as lien waivers, signed releases of a sub's or supplier's right to file a claim against the property.
The architect reviews both forms and signs the certificate. Under sections 9.5 and 9.6 of A201 it can certify a different amount than the contractor asked for, initialing every changed figure and attaching an explanation. The owner then pays the contractor directly, based on the amount certified.
Pay app mistakes that hold up payment
Check these first when a pay app bounces:
- A G702 that doesn't tie to the G703, or a column C total that doesn't match the contract sum to date.
- Line 7 taken from what you applied for last month instead of what the architect certified.
- Installed materials added to column E without being taken out of F, which bills them twice.
- Early lines billed at a higher percent complete than the site shows.
- Missing backup, such as a subcontractor's lien waiver or the invoice for stored material.
Where job costing fits
A pay app tells the owner how much of the job is done. It does not tell you whether the job is making money. That takes job costing: recording each cost against its job and its cost code, a label for the type of work, as it happens.
For construction companies, Clyr texts the cardholder at the swipe, they reply with a photo of the receipt, and the expense lands in your books, coded to the right job. Vendors can email invoices, like the one for that exhaust hood, straight into Clyr, approvals route by your rules, and you pay by ACH (electronic bank transfer) or check. Invoicing itself, pay apps included, happens in your existing billing workflow.
FAQs
Pay app is site shorthand for pay application, and it doesn't have to be on AIA forms. EJCDC, the engineers' contract documents committee, publishes its own C-620 application. Subcontractors send pay apps too, sometimes on AIA's subcontractor versions, the G702S and G703S.
The form has a notary block, and AIA's instructions say to have it notarized. A201-2017 is softer: the application is notarized "if required," so check your contract and the project specifications. If neither does, confirm with the owner before you skip it.
Usually not. Line 2 and the change order summary carry only changes the owner has approved, so extra work with no signed paper waits. A construction change directive, an order to proceed before the price is agreed, is the exception: an AIA Contract Documents article says you can include eligible costs for directed work in pay applications while the final cost is settled. Undisputed amounts then become change orders, and disputed ones follow section 7.3 of A201.
Read the explanation attached to the certificate, fix what it points to, and bill that work again next month. Because next month's column D and line 7 start from the certified figures, the cut amount stays in the balance to finish and can be billed again once the reason is fixed. If you think the cut is wrong, raise it in writing and follow your contract's dispute steps rather than padding next month's numbers.
