How to Turn an Approved Estimate into Contracts & AIA/Progress Billing

Turning an approved estimate into a live project takes four steps. Lock scope and price. Build a schedule of values. Pick your billing method. Set your retainage and documentation rules. With that baseline set, you can issue Pay App 0 or a kickoff invoice.

How do you go from approved estimate to signed contract?

Confirm scope, inclusions, exclusions, allowances, and payment terms. Once the client signs, create the project. Field, billing, and accounting then share one job.

• Finalize scope and terms, then get a signature or e-approval
• Convert the estimate into a contract project
• Confirm tax rates, markups, and the payment schedule
• Attach drawings, specs, and required certificates

How do you build the SOV and billing schedule?

Group estimate lines into clear SOV items. Align units and values so percent-complete math stays simple. See build a schedule of values from an estimate for the full method.

• Create the schedule of values from estimate groups
• Assign units (LF, SF, EA) or milestones per line
• Define the retainage rate and stored-materials rules
• Validate SOV total equals contract sum, base plus approved COs

How do you choose between AIA and progress billing?

Pick the method the owner or lender expects. Then stick with it for the whole project.

• AIA billing (G702/G703): required on many commercial and public jobs
• Progress billing: flexible milestones or percent complete on private work
• Set a monthly cadence and documentation standards up front
• Reference SOV lines on every invoice and pay app

How do you handle retainage, stored materials, and change orders?

Define these rules before your first submission. That avoids approval delays.

• Apply retainage the same way to SOV and CO lines, often 5 to 10 percent
• Require proof for stored materials: photos, invoices, location, insurance
• Route change orders for written approval before extra work
• Carry stored-material credits to work in place once installed

How do you issue the first pay app or kickoff invoice?

Lock the structure with a zero-dollar Pay App 0. Or collect a deposit if terms allow. Attach supporting documents to speed review.

• Submit Pay App 0 (G702/G703) to confirm the format
• Or send a deposit invoice with online payment options
• Include photos, delivery tickets, and lien waiver templates
• Schedule the next billing date and a documentation cutoff

How do you keep accounting and AR clean?

Sync approved invoices and payments to your general ledger. That removes double entry.

• Map items and codes, then sync via QuickBooks integration
• Track AR aging with retainage held separately
• Post payments and processing fees to the right accounts
• Reconcile monthly and lock closed periods

When should you use AIA versus progress billing?

Use AIA billing when a lender or public owner requires G702/G703 forms. Use progress billing on private jobs that want a simpler format. Both bill for work as it gets done.

Skip a full SOV on small lump-sum jobs. A single invoice may be enough there.

• The owner or lender requires AIA forms
• The job runs in phases over several months
• You bill by percent complete and track job progress
• A simple invoice fits very small, quick jobs

How does Werx avoid rework on the handoff?

Contractor software like Werx keeps one structure from estimate through billing. The same lines and codes carry the whole way.

• Mirror estimate, SOV, and G703 line descriptions
• Use standard cost codes and units on every project
• Document progress weekly, not just at month-end
• Archive owner approvals and pay app packages for the audit trail

Key takeaways

• Convert the approved estimate to a contract project and SOV
• Choose AIA or progress billing, then set cadence and documentation
• Define retainage, stored-materials, and change-order rules early
• Use Pay App 0 or a deposit invoice to kick off cleanly
• Sync invoices and payments to QuickBooks to avoid double entry