Construction projects are already complex, and the last thing teams need is for payment to turn into a whole ordeal. Unfortunately, inconsistent practices make it easy for billing to go off track. Without a clear framework, applications quickly become confusing, time-consuming, and prone to disputes.
That's where AIA billing steps in. Developed by the American Institute of Architects (AIA), this standardized system streamlines the process of submitting payment applications. It creates a common language for contractors, architects, and owners, ensuring progress is documented and payments flow smoothly.
AIA billing uses two key forms—G702 and G703—to structure payment requests. Over time, these forms have become so widely adopted that their format is often used across the industry, even in documents that don't carry the AIA label.
This guide covers the fundamentals of AIA billing, including what it is, how it works, and the best practices for using it.
Table of contents:
AIA billing is a standardized method for handling payment applications in construction projects. It uses specific forms to document work progress and request payment in a clear, consistent format, ensuring that contractors, architects, and owners follow the same process.
Think of AIA billing as a common language for construction payments. Instead of juggling confusing construction invoices and inconsistent paperwork, everyone uses clear, standardized forms.
AIA billing follows a set of structured steps and documents that teams use when requesting and approving payments. Here are the components involved:
These forms capture essential details, including work progress, stored materials, and amounts due. They help ensure payment applications are clear, organized, and easy to review.
The SOV breaks a project into phases with assigned dollar values, allowing contractors to bill accurately and incrementally as they complete each phase or portion of the project.
Payment applications often require additional paperwork to ensure compliance and transparency. These may include:
Together, these supporting documents verify that everyone meets their obligations and all parties involved in the project are properly covered before funds are released.
A portion of payment may be withheld until milestones are reached or the project is complete. This protects the owner while ensuring contractors deliver quality results.
Once all documentation is reviewed and approved, payments are issued—minus any retainage—so everyone is compensated fairly and in alignment with project progress.
The main draw of AIA billing is standardization: it gives everyone in the project a consistent framework to follow. But this process has a lot more benefits, from reducing headaches to improving payment speed. Consider the following:
Forms and documentation are cornerstone pieces of AIA billing. And while there are several types of AIA documents, GCs use two key forms: the AIA G702 Application and Certificate for Payment and the AIA G703 Continuation Sheet.
Let's examine what these forms are all about.
The G702 is a standardized document contractors use to request payment.
The G703 form expands on the Schedule of Values (SOV) by breaking the project into detailed line items. For each task, it shows the percentage completed, stored materials, and associated costs.
This level of detail helps contractors bill accurately and gives owners visibility into where money is going.
The G702 and G703 are two sides of the same coin. The G702 highlights the key figures contractors need approved (e.g., total work completed, retainage, payment due, etc). The G703 complements it by breaking those numbers into itemized details, so people can see progress at a granular level.
In addition to organizing payment requests, AIA billing helps contractors and owners stay compliant with legal, financial, and contractual requirements. Here's how:
Nothing and no one is perfect. Even with standardized forms and procedures, mistakes can still happen. When it comes to AIA billing, here are the pitfalls contractors and teams often encounter, along with practical tips to stay on track.
When the Schedule of Values (SOV) isn't carefully prepared, it can lead to overbilling or underbilling. This creates confusion, slows approvals, and may raise red flags with owners or architects.
How to avoid it: Always align SOVs with the contract scope, review line items carefully, and update values if change orders are approved. Regular internal checks ensure your billing stays accurate and credible.
Forgetting to attach lien waivers, insurance certificates, or other compliance paperwork is a common issue that can stall payments. Owners need these documents to confirm obligations have been met.
How to avoid it: Create a submission checklist that includes all supporting documents. Using billing software that prompts for lien waivers and compliance files can also help keep everything complete.
Submitting billing applications past the deadline almost always leads to slower approvals and delayed cash flow. Even one late submission can disrupt project finances.
How to avoid it: Mark submission deadlines on your project calendar and set reminders a few days in advance. Streamlining with digital tools can help you submit on time, every time.
AIA billing success comes down to two things: preparation and consistency. The proper habits not only speed up approvals but also protect your business from disputes. Here are the best practices to keep in mind:
A strong construction billing process begins with a detailed SOV. Break your project into specific tasks and assign accurate dollar amounts to each one. This level of clarity helps owners understand what they're paying for, ensures contractors bill correctly, and makes progress tracking simple. An accurate SOV sets the foundation for smooth billing throughout the project.
Manual billing can slow you down and leave room for mistakes. Digital platforms that support G702 and G703 formats automate submissions, calculate totals, and even flag errors before they cause problems.
In construction, a clear paper trail is your best defense. Keep thorough records of work completed, stored materials, change orders, and approvals. These documents not only back up your pay apps but also help resolve disputes quickly if questions arise.
Billing isn't just about forms—it's about trust. Keep owners, architects, and stakeholders in the loop with regular updates on progress and expected billing. In doing so, you'll reduce surprises, prevent disputes, and build confidence that your applications reflect actual project status.
Industry rules don't stand still, and neither should your billing practices. From lien law updates to shifting tax codes, staying current protects your business from compliance missteps. Regularly review legal requirements and adjust your billing process as needed.
AIA billing may feel complex at first, but with standardized forms and clear processes, it transforms payment applications into a smoother, more transparent experience. When you fully understand the G702 and G703 forms, and follow best practices, teams can protect cash flow and reduce disputes. Ready to simplify your billing process?
Explore GCPay's AIA Billing Tools, including optional official AIA G702/G703 forms (via a partnership with AIA Contract Documents) to automate applications, stay compliant, and keep your projects moving forward with confidence.
The G702 summarizes the overall payment request, showing totals, retainage, and payment due. The G703 serves as the detailed continuation sheet, breaking those totals into line items that show progress, stored materials, and remaining balances.
Construction accounting services streamline financial tracking, billing, and compliance. They help teams manage cash flow, monitor project budgets, and ensure payment applications are accurate and timely.
The best contractor billing solutions automate AIA forms, support compliance documentation, and integrate with project management tools. They reduce manual errors, speed approvals, and create transparency, helping contractors get paid faster and owners gain confidence in the process.
AIA forms include contract details, work completed, stored materials, retainage, and payment requests, all certified for accuracy. Together, they standardize billing, provide transparency, and ensure everyone—from owners to contractors—works from the same set of numbers.
