AIA Billing: The Complete Guide for Contractors

If you have ever waited weeks for a payment that should have arrived days ago, you already know why AIA billing matters. These standardized forms, developed by the American Institute of Architects, have become the default method for requesting progress payments on commercial and government construction projects. Yet despite filling them out month after month, many contractors still submit applications with errors that push payment to the next billing cycle.

What Is AIA Billing and Why Should You Care?

AIA billing refers to a standardized payment application system built around two primary documents: 

1. The G702 (Application and Certificate for Payment)
2. The G703 (Continuation Sheet). 

Together, these forms give contractors a consistent method to request payment while providing project owners and architects with clear documentation of work completed.

The G702 functions as the summary page. It shows the original contract value, any approved change orders, total work completed to date, materials stored on site, retainage withheld and the current amount due. The G703 provides the supporting detail, breaking down work by line item according to your Schedule of Values.

The numbers behind construction payment delays reveal why getting these forms right matters so much. According to Rabbet’s 2024 Construction Payments Report, 82% of contractors now experience payment delays exceeding 30 days. Just two years earlier, only 49% faced delays that long. Every rejected pay application means another month of waiting, and in construction, cash flow determines whether you can pay your crews and take on new work.

Understanding the G702 and G703 Forms

The two forms work as a package. The G703 contains the detailed calculations; the G702 summarizes those figures and provides space for the architect’s certification.

Your G703 lists every scope item from your Schedule of Values in separate rows. For each line, you record:

• The scheduled value
• Work completed in previous periods
• Work completed this period
• Materials stored
• Total completed and stored to date
• Percentage complete
• Balance remaining

The grand total must match line 4 on your G702 exactly.

This process connects directly to percent complete accounting, the revenue recognition method most construction companies follow. Your WIP schedule ties to GAAP revenue recognition; your AIA pay app ties to contract billing. Differences between the two are normal and show up as over/underbillings (contract assets/liabilities), often due to retainage, stored materials, timing of approvals, or how costs measure progress under ASC 606. Your AIA billing percentages should reflect actual job cost data from your accounting system.

The WIP (work-in-progress) schedule also plays a role here. Your WIP tracks costs incurred and revenue recognized on every active project. When your billing percentages do not align with your WIP, it creates discrepancies that can cause problems during audits or when seeking bonding approval.

How to Complete Your Pay Application Correctly

Start with the G703 continuation sheet, then transfer totals to the G702. This approach reduces errors and ensures your numbers tie together properly.

Review your Schedule of Values (SOV) before each billing cycle. The SOV assigns a dollar value to each scope item and serves as the foundation for every payment request. Avoid front-loading values to inflate early payments. This creates overbilling situations that damage relationships with project owners.

For each G703 line item, determine the actual percentage of work completed. Base this on real progress rather than optimistic projections. Multiply the scheduled value by the completion percentage to calculate work completed. Add any stored materials that meet contract requirements for storage payment.

After completing your G703, transfer the grand total to line 4 on your G702. Apply the contractual retainage percentage to both work completed and materials stored. Subtract retainage, then subtract previous payments received. The result is your current payment due.

Before submitting, verify all math is correct. Include supporting documents like lien waivers from subcontractors and evidence of stored materials. A complete submission package reduces back-and-forth communication that delays approval.

Common Mistakes That Delay Your Payments

Math errors between forms cause immediate rejection. When your G703 grand total does not match line 4 on your G702, your application goes back to you. Use spreadsheet formulas or billing software to eliminate calculation mistakes.

Overbilling and underbilling create different problems. Overbilling occurs when you bill more than the work actually completed. While this might seem like a short-term cash flow solution, it erodes trust and invites closer scrutiny of future applications. Underbilling means you performed work but did not bill for it, essentially providing interest-free financing to the project owner.

According to Construction Dive’s reporting on Billd’s 2025 survey, general contractors believed payments occurred within 30 days after a pay application, but subcontractors waited 56 days on average. This gap highlights why accurate, timely billing matters.

Missing documentation also causes preventable delays. Before submitting any pay application, confirm you have included lien waivers, certified payroll for government projects, progress photos and approved change order documentation.

Build a Stronger Billing Process for Your Business

AIA billing forms provide the structure, but your internal processes determine whether you collect payments on time. Contractors who maintain accurate job costing systems and updated WIP schedules submit cleaner applications and experience fewer delays.

If your construction company struggles with billing accuracy or cash flow management, our construction CPAs can help you build the accounting infrastructure that supports your growth. Contact a James Moore professional to discuss how our services can put your business on a stronger financial foundation.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.