Getting paid in construction isn’t as simple as sending an invoice and waiting for a check. Because projects are complex and payments are tied to progress, contractors often submit payment applications — formal requests for payment backed by detailed documentation.
What Is a Payment Application?
A payment application is a structured request that shows:
- The work completed to date
- Materials stored on-site (or sometimes off-site)
- The amount being requested for payment
- Supporting documents such as lien waivers or receipts
Unlike a simple invoice, a payment application is designed to give owners, lenders, and architects confidence that the request matches actual progress.
The Role of AIA Forms
In U.S. construction, the AIA’s G702 and G703 forms are often the backbone of a payment application:
- G702: Serves as the summary “cover page” of the application.
- G703: Acts as the detailed continuation sheet, itemizing the schedule of values and showing percentage complete.
Contractors fill these out to align with contract terms and project schedules.
What Supporting Documents Are Included?
A payment application may also include:
- Change orders – adjustments to contract value.
- Lien waivers – assurance that subcontractors and suppliers have been (or will be) paid.
- Certificates of insurance or compliance – depending on the contract.
This makes the payment application not just a billing request, but part of the risk management process.
Why Payment Applications Matter
For contractors, accurate and timely payment applications are crucial to cash flow. They:
- Keep billing aligned with actual progress.
- Reduce disputes with owners and lenders.
- Help ensure subcontractors and suppliers get paid on time.
- Provide a clear paper trail for financing and audits.
Key Difference from a Construction Invoice
- A construction invoice is the billing document itself — often built using AIA forms.
- A payment application is the full package of forms and supporting materials submitted to request payment.
Think of the invoice as one piece of the payment application puzzle.