What are AIA Pay Applications?
AIA Billing, sometimes called AIA Pay Applications, is the industry-standard format for progress billing in construction projects. It provides contractors and owners with a consistent way to track payments and project progress.
- Percentage of work completed
- Amount billed to date
- Retainage withheld
- Current payment due
Why Contractors Use AIA Billing
Contractors use AIA Billing because it helps standardize documentation and reduce misunderstandings with project stakeholders. It also supports compliance with financing and audit requirements.
- Builds trust with owners through transparency
- Provides documentation lenders and banks expect
- Keeps retainage and progress payments organized
- Reduces billing disputes and delays
Key AIA Billing Forms (G702 & G703)
The AIA billing process centers on two standardized forms. These forms work together to present both the big picture and the line-by-line details of project billing.
- G702: Application for Payment – the summary form that shows contract value, retainage, and balance due.
- G703: Continuation Sheet – a detailed breakdown of the contract, often called the Schedule of Values (SOV).
Common Challenges with AIA Billing
While effective, AIA Billing can be slow and error-prone when done manually. Even small mistakes can lead to disputes and payment delays.
- Time-consuming manual calculations
- Errors on G702 or G703 forms delay approval
- Tracking retainage across projects is difficult
- Paper forms often create disputes or rework
How Software Simplifies AIA Billing
Modern billing software automates AIA Pay Applications, helping contractors save time and reduce errors. Werx makes the process faster and integrates billing with accounting workflows.
- Create Schedules of Values (SOVs) directly in the system
- Automatically calculate retainage and payment due
- Sync with QuickBooks Online for accounting accuracy
- Generate professional G702 and G703 forms in minutes
FAQs About AIA Billing
What does AIA stand for in AIA Billing?
AIA stands for the American Institute of Architects. They developed the standardized pay application forms (G702 and G703) that contractors use to bill for work completed. These forms have become the industry benchmark for progress billing in construction.
What is retainage in AIA Billing?
Retainage is a portion of payment withheld—usually 5% to 10%—until the project reaches substantial completion. This practice protects owners and lenders by ensuring contractors finish all work to specifications before receiving full payment. Software like Werx makes tracking retainage easy across multiple projects.
Can small contractors use AIA Billing?
Yes. While AIA Billing is common on large commercial jobs, many small and midsized contractors use it too. Any project requiring transparency, lender approval, or government oversight can benefit from AIA Pay Applications, regardless of company size.
TL;DR Recap
- AIA Billing = standardized progress billing with G702/G703 forms
- Ensures transparency, tracks retainage, reduces disputes
- Manual AIA Billing = errors + delays
- Werx automates AIA Billing with QuickBooks sync, online pay apps, and faster approvals
