However, there are a number of construction projects that will require to use the standardized American Institute of Architects pay application. After paying, you cannot edit this information; it will be permanent in the final document. Typically it's 5% to 10% of the current invoice. . Less previous certificates for payment, Line 9. If the application is properly completed and acceptable to the architect, the architect’s signature certifies to the owner that a payment in the amount indicated on Line 8 of the G-702 is due to the contractor. Sometimes work is both added and deducted in the same period. Annual subscription with unlimited access Cost: $999.99 per user for AIA members, $1249.99 per user for non-AIA members (with discounts for multiple users). Hi, my name is Terria Willis and I an very interested in learning AIA billing. This section is the real meat and potatoes of the AIA G702, where all the charges and deductions are calculated. The schedule of values is an agreement showing all of the work to be completed during the project, and the associated cost for each line item. What is a construction payment application? The “contract sum to date” is the original contract price (from line 1) combined with the net change by change orders from line 2. Remember, change orders don’t just add work. In this section, you write the amount of the percentage withheld in lines 5a and 5b. Make sure to save the new information before proceeding. The AIA billing system is a standardized method of construction percentage of completion contract billing (IE: Progress Billing) developed by the American Institute of Architects (AIA) in 1992. How to File a Mechanics Lien: The Ultimate Step-by-Step Guide For Any State, How Do Mechanics Liens Work? Take the work completed and materials stored amount (line 4) and subtract the total amount of retainage that was calculated in line 5. In the construction business, everything comes down to the contract. Nancy Smyth, Sunburst Software Solutions, Inc.QuickBooks Construction & Payroll Expert. The AIA billing system is a standardized method of construction percentage of completion contract billing (IE: Progress Billing) developed by the American Institute of Architects (AIA) in 1992. A change order is an agreement to add or deduct work, made between you and the party that hired you. It should come as no surprise, that one of the most important documents would be a payment application. It requires more than just a simple “This is how much you owe me.” It is a full breakdown of what’s been paid to date, how much retainage applies, the remaining cost to complete the work, and more. If you’re using standard AIA documents on your project, see our guide to the AIA G701 Change Order form. This is essentially the approval of your request, and receipt for payment. Just as before, you are able to email the invoice to the client: Finally, when previewing and downloading the document, you will see the pay app and continuation sheets. Quite frequently, in the construction industry, it is a requirement that you submit your progress billings on AIA Forms G-702/G-703. Payroll, Bookkeeping & Accounting Task Checklist, VIDEO: How To Make Your QuickBooks Customer:Job List More Meaningful, Welcome to Learn to use QuickBooks in your construction business, eBook: Getting Equipment Costs into QuickBooks Job Costing Reports, Get 20% Off QuickBooks Pro Small Business Accounting Software + Free Shipping, Save 20% Off QuickBooks Premier Accounting Software + Free Shipping, Buy QuickBooks Enhanced Payroll and Save 20%, G-702 Contractors Application for Payment, forget about any basic accounting principals you’ve ever learned, ignore change orders that have been submitted or approved, but not processed, ignore money that is still outstanding from previously submitted applications for payment. The contractor submitting the pay application should leave this section blank. When filling out the G702, you can pull the amount for line 4 straight from “Grand Total” on the Continuation Sheet. The American Institute of Architects is a professional organization comprised of over 90,000 licensed architects and other industry professionals. Here will break down each section, what information is being requested, and how to fill them out. A negative number means that you deducted, or reduced, the amount of work from the contract. We’ll explain this section more a bit further down. Unlimited document access and finalizations. This includes the name and address of the owner, the party requesting payment, the architect (if applicable), and the project itself. This field is simple because it will never change pay app to pay app. Thank you for your time and hvae a great day! The contractor submitting a pay app is asking for approval of their request for payment. Learn to use QuickBooks® in your construction business - QuickBooks® for Contractors Bookkeeping Tips & Training - Copyright ©2012 - 2017. To fill out one correctly, you pretty much have to: You need to realize that the payment applications that you submit are an important piece of your overall cash flow management. When the information looks like below, invoice the retainage once more: Now that the retainage value has been reset to 0%, the amount that was previously retained is now moved back into the AIA invoice. I currently work for a company that does residential and commercial billing but I would like to set my sights higher in the commercial side of things. I'm a general contractor and we are getting ready to sign the contract. It’s definitely a good place to start. AIA G702 – basic single document Cost: $9.99 for AIA members, $11.99 for non-AIA members. Is Preliminary Notice Required In My State? Any pay app errors or miscalculations can lead to the application being denied, and being forced to wait longer for payment. Total completed and stored to date, Line 7. However, if it’s a subsequent application, you will put the amount from line 6 of the previous certificate. | Construction Accounting. One main service that the institute provides are the standard AIA Contract Documents that they offer. Now I get paid in 17 days. The results of this section will determine what number to use on line 2 of the payment application. You … The American Institute of Architects (AIA) produces one of the most widely used pay apps, also known as the AIA G702-1992. The Continuation Sheet shows an itemized list of work you’ve completed during the period, along with the “scheduled value” or cost. Retainage. This form allows the architect to certify an amount different than the amount applied for, with explanations provided by the architect as to why the amount is different. Download your item before leaving this page! The AIA offers three ways to purchase the G702 Application and Certificate for Payment. To get this figure, add line 2 to line 1 (if line 2 is a negative number, adding it to line 1 will reduce the total amount). “Contract for” asks for a brief description of the labor or materials you are providing, along with the date the contract was signed and the project number (if there is one). The last sections in the header refer to the pay application and the contract itself. It’s a one-page form with some contact information and 9 payment fields. Also known as the AI G702. These documents are one of the most commonly used contracts in the construction industry. So don’t sign that pay app until you’re in front of a notary public! Errors can cause the architect or owner to “redline” your application, or reject it. You can edit the document online or offline (using Microsoft® Word or Excel). But it is not the only acceptable form in the construction industry. It happens on almost every project since construction rarely goes exactly as planned. Includes unlimited drafts, but only one finalized PDF per purchase. On this line, you will subtract previous payments that you have already received. AIA Document G702 is a product of the American Institute of Architects. The first? Other standardized payment application forms include those from ConsensusDocs. This can delay payment and create cash flow issues, so pay attention to detail. QuickBooks® for Contractors Bookkeeping Tips & Training. Since everything aside from the original retainage has been invoiced, this value is all that is left. Multiply line 5a by the total work completed, then multiply line 5b by the total value of materials stored and add them up. Continuation Sheet full payment and reduce the possibility of errors total earned less retention in... May still accept it is merely the remaining contract price is exactly as sounds. Frustrating and difficult template here project manager, or reduced, the amount from line 6 poorly done/incomplete project State. 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