Getting paid in construction requires more than sending an invoice. Projects involve progress tracking, approvals, and documentation — which is why contractors use payment applications.
A payment application is a formal request for payment that shows the value of work completed, materials stored, and any retainage held. It helps maintain transparency between the contractor, architect, and project owner, ensuring payments match actual progress.
This guide explains how payment applications work, the forms used (like AIA G702 and G703), and how to prepare them correctly to keep your billing process smooth and compliant.
What a Payment Application Includes
A standard payment application contains three key parts:
- Summary page – Outlines contract value, approved changes, work completed, retainage, and the amount due for the billing period.
- Schedule of Values (SOV) – Breaks down the contract into specific cost items and shows progress for each.
- Supporting documents – Proof such as lien waivers, supplier invoices, delivery receipts, photos, or certified payroll records.
Each submission provides a snapshot of the project’s financial progress at a specific point in time.
AIA G702 and G703 Forms
Most U.S. projects use the AIA G702 and G703 forms, developed by the American Institute of Architects, as the industry standard for payment applications.
- AIA G702: The “Application and Certificate for Payment” form summarizes key totals — contract value, completed work, retainage, and payment requested.
- AIA G703: The “Continuation Sheet” provides the detailed Schedule of Values, listing each portion of work and its completion percentage.
These two forms together give owners, architects, and contractors a consistent format for reviewing and approving payments.
How the Process Works
- Create the Schedule of Values
Before billing begins, establish a detailed list of work items and their assigned costs. This serves as the foundation for every future application. - Track Progress
Record completed work and materials stored during the billing period. Accuracy here determines how much you can bill. - Complete the Pay App Forms
Fill out the G702 and G703 or equivalent forms, updating totals and percentages for each cost item. - Attach Documentation
Include all required proof — lien waivers, receipts, change orders, or progress photos. - Submit for Review
Send the application to the GC, architect, or owner. They’ll verify the data and approve it for payment. - Receive Payment
Once approved, payment is released according to the contract’s schedule. Retainage (usually 5–10%) is held until project completion.
Common Issues That Delay Payment
- Inaccurate or inconsistent figures
- Missing or outdated supporting documents
- Submitting after the cutoff date
- Billing ahead of actual progress
- Not updating the Schedule of Values after change orders
Attention to detail and timely submission can prevent most of these delays.
Best Practices for Contractors
- Stick to a regular billing schedule – Usually monthly, based on contract terms.
- Keep documentation organized – Store receipts, change orders, and approvals together.
- Use software tools – Automate calculations and maintain a clean audit trail.
- Communicate proactively – Discuss progress and pending changes before submission.
- Understand retainage rules – Know when the withheld funds will be released.
Final Thoughts
Payment applications are more than paperwork — they’re the backbone of financial management in construction projects. When prepared accurately and submitted on time, they help contractors maintain steady cash flow, build client trust, and avoid disputes.
Mastering this process ensures your work gets recognized and your payments arrive without unnecessary delays.