What Is AIA Billing?
AIA billing is a standardized method of requesting progress payments on a construction project, built around a pair of forms published by the American Institute of Architects: G702, the Application and Certificate for Payment, and G703, the Continuation Sheet. It is the most widely used payment application format in US commercial construction.
The G702 and G703 Forms
- G702, Application and Certificate for Payment:
The summary document showing the contract sum, total completed and stored to date, retainage, previous payments, and the current amount due.
- G703, Continuation Sheet:
The detailed breakdown behind the G702 summary, listing every line item from the schedule of values with its scheduled value, percentage complete, and amount billed to date.
Together, the two forms let anyone reviewing a payment application see both the bottom-line amount due and exactly which line items of work that amount is built from, which is what makes the format auditable rather than just a lump-sum request.
How the AIA Billing Process Works
- Establish the schedule of values.
Before billing begins, the contract value is broken into line items, which becomes the basis for every subsequent pay application.
- Contractor submits a pay application.
G702 and G703 completed showing percentage complete for each line item as of the billing date.
- Architect or owner's representative reviews and certifies.
Confirming the claimed percentage complete against actual observed progress.
- Payment is issued.
For the certified amount, minus retainage, minus amounts already paid in prior applications.
- The cycle repeats.
Typically monthly, with each new application building on the cumulative percentages from the last.
A Worked AIA Billing Example
EXAMPLE
A line item for 'Framing' has a scheduled value of $120,000. As of this billing period, framing is 60% complete.
Amount billed to date = $120,000 × 0.60 = $72,000.
If the prior application billed 40% complete ($48,000), this period's billing for that line item = $72,000 − $48,000 = $24,000.
This calculation repeats for every line item on the G703, and the totals roll up into the G702 summary.
AIA Billing and Retainage
Retainage is built directly into the G702 form as a standard line item, deducted from the certified amount before payment is issued. This is why AIA billing and retainage are so closely linked in practice: the standardized form is specifically designed to make the retainage calculation and its running total visible on every single payment application, rather than tracked as a separate side calculation.
Why AIA Billing Requires Careful Validation
Because the schedule of values is set once but percentages are billed repeatedly over the life of the project, an AIA pay application depends on comparing this period's claimed percentages against every prior period, not just checking the current application in isolation. A percentage complete that goes down from one application to the next, or that jumps unrealistically compared to actual progress, indicates an error or a dispute that needs resolution before payment.
For a general contractor receiving pay applications from many subcontractors simultaneously, validating this consistently across every subcontractor and every billing period, rather than trusting each application as submitted, is what keeps the overall project's certified billing accurate and defensible.
Frequently Asked Questions About AIA Billing
AIA billing is a standardized construction payment application process built on forms published by the American Institute of Architects, primarily G702 and G703, used to request progress payments based on completed work percentages.
2. What are AIA forms G702 and G703?
G702, the Application and Certificate for Payment, is the summary showing contract sum, amount completed, retainage, and current amount due. G703, the Continuation Sheet, is the detailed line-item breakdown behind that summary, based on the schedule of values.
3. How does the AIA billing process work?
A schedule of values is established at contract start, the contractor submits a pay application showing percentage complete per line item, the architect or owner's representative certifies it, and payment is issued for the certified amount minus retainage and prior payments.
4. How is retainage handled in AIA billing?
Retainage is built into the G702 form as a standard line item, calculated and deducted from the certified amount on every pay application, making the running retainage balance visible throughout the project rather than tracked separately.
5. Why is AIA billing validation important?
Because each application builds on cumulative percentages from every prior one, comparing only the current application in isolation can miss errors, such as a percentage that decreases or jumps unrealistically compared to actual progress on the project.
6. What software supports AIA billing?
Most construction-specific accounting and project management platforms, including tools built for QuickBooks integration and dedicated construction ERPs, offer AIA billing templates that generate G702 and G703 forms directly from the project's schedule of values.
