Progress billing
Schedule of values in, payment application out — with retainage done the way your contract actually holds it.
The line that costs contractors money
Retainage. It is held at one rate on work in place and often a different rate on materials sitting on site — sometimes none at all on stored materials. Almost every free template applies a single rate to everything, and that error only ever runs one way: it under-bills you, not the owner. Both rates are separate fields here and both are shown on the application.
The schedule of values has to add up
Your line values should total the contract sum. When they don’t, every percentage-complete figure on the application is wrong and nothing on the form tells you — you find out on application five. So the difference is checked and stated plainly. Approved change orders normally need lines of their own for the totals to reconcile.
Closing a period
When an application is certified, this period’s work becomes previous work, the period columns clear, and the certificate total carries forward. Doing that by hand across a spreadsheet is exactly where running totals drift, so it is one button.
Where it meets the other tools
This and the change order tool read and write one contract record. Approve a change there and the contract sum here moves on its own — they cannot disagree about what the job is worth, which is the failure mode when the two live in separate spreadsheets.
Your estimate is usually the right schedule of values already: the breakdown that won the job is the breakdown to bill against. For smaller work with no contract sum to draw against, the invoice is the simpler document. The retainage this application holds gets released by the punch list, which is why that tool prices itself against this one. And on commercial jobs, the subcontractors billing you should have a current certificate on your COI register before their line gets paid.
An AIA-style payment application in the conventional format — not a reproduction of AIA’s copyrighted G702 or G703 documents. Where a contract requires those specific forms, use this for the arithmetic and the backup. General information, not legal or accounting advice; your contract governs retainage, timing and what must be submitted. Everything is built on your device.
Questions people ask
- How is retainage calculated on a payment application?
- Retainage is withheld as a percentage of what has been earned, and it is normally held at a different rate on completed work than on materials delivered but not yet installed — sometimes at no rate at all on stored materials. Calculating both at a single rate is the most common error on these applications, and it always under-bills the contractor rather than the owner. Check your contract for both figures.
- What is a schedule of values?
- A breakdown of the contract into the pieces you bill against, each with a scheduled value. The values should total the contract sum. If they do not, every percentage-complete figure on the application is wrong, which is why the difference is worth checking before the first application rather than after the fifth.
- How do I calculate the current payment due?
- Total completed and stored to date, minus total retainage held, gives total earned less retainage. Subtract the previous certificates for payment and what remains is the current payment due. The balance to finish is the contract sum to date less total earned less retainage.
- Do approved change orders go on the payment application?
- Yes — approved change orders adjust the contract sum, which is the figure the application bills against, and they usually need their own lines on the schedule of values so the values still total the contract sum. Pending change orders should not be included, because billing against work the owner has not approved can hold up the whole application rather than just that line.