From Approved Estimate to Signed Contract
Start by confirming scope, inclusions/exclusions, allowances, and payment terms. Once the client signs, create a contract project so field, billing, and accounting reference the same job.
- Finalize scope and terms; obtain signature/e-approval
- Convert the estimate into a Contract Project
- Confirm tax rates, markups, and payment schedule
- Attach drawings, specs, and required certificates
Build the SOV & Billing Schedule
Group estimate lines into clear SOV items. Align units and values so percent-complete math is simple and defensible.
- Create the Schedule of Values from estimate groups
- Assign units (LF, SF, EA) or milestones per line
- Define retainage rate and stored-materials rules
- Validate SOV total = contract sum (base + approved COs)
Choose Your Billing Method: AIA vs. Progress
Pick the approach the owner or lender expects and stick with it for the project.
- AIA Billing (G702/G703): required on many commercial/public jobs
- Progress Billing: flexible milestones/percent-complete on private work
- Set cadence (monthly) and documentation standards upfront
- Reference SOV lines on all invoices/pay apps
Retainage, Stored Materials & Change Orders
Define these rules before your first submission to avoid approval delays.
- Apply retainage consistently to SOV and CO lines
- 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” when installed
Issue the First Pay App or Kickoff Invoice
Lock the structure with a zero-dollar submission (Pay App 0) or collect a deposit if terms allow. Attach supporting documents to speed review.
- Submit Pay App 0 (G702/G703) to confirm format
- Or send a deposit invoice with online payment options
- Include photos, delivery tickets, and lien waiver templates
- Schedule the next billing date and documentation cutoff
Sync to Accounting & Keep AR Clean
Remove double entry by syncing approved invoices and payments to your general ledger.
- Map items/codes and sync via QuickBooks integration
- Track AR aging with retainage separately
- Post payments (incl. Stripe fees) to the right accounts
- Reconcile monthly; lock closed periods
Best Practices to Avoid Rework
Consistency wins. Use the same structure from estimate through billing.
- Mirror estimate → SOV → G703 line descriptions
- Use standard cost codes and units for every project
- Document progress weekly; don’t wait for month-end
- Archive owner approvals and pay app packages for audit trail
FAQs About Turning Estimates into Billing
What is Pay App 0 and why use it?
Pay App 0 is a zero-dollar AIA submission that confirms your SOV structure, retainage setup, and formatting with the owner/lender before real billing begins—reducing first-cycle rejections.
Do I need an SOV for small projects?
Not always. For small private jobs, a simple progress invoice may be enough. If a lender or contract requires detail, build a lightweight SOV to match.
Can I switch billing methods mid-project?
Only with owner approval—and it’s rarely ideal. Set the method (AIA vs. progress or T&M) in the contract and keep it consistent for clean reporting.
TL;DR Recap
- Convert the approved estimate to a contract project and SOV
- Choose AIA or progress billing and set cadence/documentation
- Define retainage, stored-materials, and change-order rules early
- Use Pay App 0 or a deposit invoice to kick off cleanly
- Sync invoices/payments to QuickBooks to avoid double entry
