Understanding AIA Applications for Payment, G702 and G703 Pay Apps

A Guide for Contractors and Owners

In the construction industry, managing payments efficiently is crucial to maintaining cash flow and ensuring that projects progress smoothly. One widely used method for requesting and processing payments is the AIA Application for Payment, a standardized approach developed by the American Institute of Architects (AIA). This system streamlines the billing process and fosters transparency between contractors, owners, and other stakeholders.

What is an AIA Application for Payment?

An AIA Application for Payment is a structured request for progress payments in construction projects. It is based on two essential forms:

  1. G702 – Application and Certificate for Payment: This form serves as the official request for payment. It provides a summary of the contract amount, completed work, retainage, and the amount due.
  2. G703 – Continuation Sheet: This document provides a detailed breakdown of the work completed by line item, making it easy to track progress and confirm billed amounts.

Why Use AIA Payment Applications?

AIA payment applications Pay Apps are widely accepted in the industry because they offer:

  • Standardization: A consistent format that simplifies the approval process.
  • Transparency: Clear documentation of work completed and pending.
  • Accountability: Owners and architects can verify progress before approving payments.
  • Efficiency: Streamlined processing helps ensure timely payments.

Key Components of a G702

When submitting an AIA payment application (AIA G702), contractors must ensure that the following elements are included:

  • Original Contract Sum: The total value of the contract.
  • Net Changes (Change Orders): Any approved additions or deductions.
  • Total Completed & Stored Work: The cumulative work completed, and materials stored on-site.
  • Retainage: A percentage withheld to ensure completion.
  • Previous Payments: A record of prior payments made.
  • Current Payment Due: The amount requested for the current billing cycle.
  • Balance to Finish: The remaining contract balance.

Best Practices for Completing an AIA Application for Payment (AIA G702)

To avoid payment delays, follow these best practices:

  1. Ensure Accuracy: Use PAYearned solution to ensure all calculations are accurate
  2. Attach Supporting Documents: Include invoices, lien waivers, and progress photos if required.
  3. Follow the Submission Timeline: Adhere to the project’s billing cycle to prevent late payments. Typically, G702 & G703’s are required by the 25th of each month
  4. Communicate with Stakeholders: Discuss any G703 continuation sheet billable items before submission.
  5. Track Changes: Properly document all “change orders” to avoid disputes. PAYearned will do this for you.

Common Challenges & How to Overcome Them

  • Rejections Due to Errors: Review submissions carefully to ensure all proposed completed work has been completed
  • Delayed Approvals: Maintain open communication with the approving parties.
  • Retainage Conflicts: Clarify retainage terms early in the contract.

Conclusion

AIA Applications for Payment (AIA G702 &G703) offer a structured and efficient way for contractors to request progress payments while ensuring transparency for project owners. By following the best practices and maintaining accurate documentation, using the PAYearned software solution construction professionals are able navigate the payment process smoothly and keep projects financially stable.

If you’re looking to simplify your AIA payment applications, consider using the PAYearned software solution that automates calculations and document management, making the process easy and seamless.

For more insights into AIA G702 and G703 construction billing and payment processes, stay tuned to our blog!