Construction projects live or die by cash flow. With multiple stakeholders — from owners to subcontractors — billing can quickly become complicated. Payment applications bring structure to this process, ensuring that work is documented, progress is verified, and everyone gets paid on time.
What Is a Payment Application?
A payment application (often called a pay app) is a formal request for payment tied to the progress of a project. Unlike a basic invoice, a payment application follows a structured format that details labor, materials, and work completed up to a specific point in time.
This structured approach ensures that owners and project managers can verify progress before releasing funds.
Key Elements of a Payment Application
- Schedule of Values (SOV) – A line-by-line breakdown of the project’s total cost, assigning a dollar value to each phase of work.
- Work Completed to Date – The percentage of each task or cost item finished during the billing cycle.
- Change Orders – Any adjustments to the original contract price due to design changes or unforeseen conditions.
- Retention (Holdback) – A small percentage (commonly 5–10%) withheld until the project is substantially complete.
- Supporting Documentation – Such as lien waivers, receipts, or certifications that confirm the work performed.
Standard Forms in U.S. Construction Billing
Most payment applications in the U.S. use forms developed by the American Institute of Architects (AIA):
- G702: Application and Certificate for Payment – The summary sheet showing the contract amount, work completed to date, change orders, retention, and the balance due.
- G703: Continuation Sheet – A detailed breakdown of costs by line item, usually tied to the Schedule of Values.
These forms create a standard language that owners, contractors, and lenders understand. Submitting accurate 702 and 703 documents is often required for approval and funding.
Why Payment Applications Matter
- Cash Flow – Contractors need timely payments to cover labor and materials.
- Transparency – Owners get a clear picture of what has been completed and billed.
- Legal Protection – Proper documentation helps support lien rights and reduce disputes.
Common Challenges
- Preparing 702 and 703 forms manually can be time-consuming.
- Small errors may cause delays in approval and funding.
- Tracking change orders and retention requires careful recordkeeping.
How Our App Helps
Our platform is designed to simplify this process. Instead of spending hours filling out 702 and 703 by hand, you can:
- Generate professional, accurate payment applications in minutes.
- Automatically calculate totals, retention, and balances due.
- Keep your Schedule of Values updated with every billing cycle.
- Store all supporting documentation in one organized place.
With a streamlined system, contractors spend less time on paperwork and more time moving their projects forward.
Final Thoughts
By making pay apps faster and easier to prepare, contractors can improve cash flow, reduce disputes, and keep every project running smoothly.