Pay Application Template — G702 & G703 Style

What a pay application is, and what the two pages do

A pay application (progress billing, application for payment, "pay app") is how a subcontractor bills a general contractor for a period of work on a fixed-sum contract. Instead of invoicing a lump amount, you bill a percentage of each line on a schedule of values, the GC or owner certifies what they agree is due, and retainage is held back until closeout. Nearly every commercial GC in the United States expects the two-page format the AIA popularized, which is why this template mirrors it line for line.

Page 1 — the application and certificate. A form register at the top identifies the parties, the project, the application number and the period. The left column carries the nine numbered lines that turn work completed into a payment due. The right column summarizes approved change orders. Below them the contractor certifies the application, and the owner, GC or architect certifies the amount they will pay.

Page 2 — the continuation sheet. A landscape table, one row per schedule-of-values line, with the lettered columns GCs read by name: A item number, B description, C scheduled value, D work from previous applications, E this period, F materials presently stored, G total completed and stored to date (D + E + F), H percent complete (G ÷ C), I balance to finish (C − G), and retainage. The grand total of column G is line 4 on page 1. If you have never built one, start with the schedule of values template; the pay application bills against it every period.

The nine lines, explained

Two lines cause most rejected applications. Line 3 must equal the column C total on the continuation sheet — if a change order was approved but never added as a row, the sheet no longer ties to the contract. And line 7 is the previous application's line 6, not its line 8: carrying the wrong number forward double-bills or under-bills a full period. The workbook computes everything except line 7, which you type in from last month.

A worked example: application no. 3

The completed example is a mechanical subcontractor's third application on a medical office building, covering August. The original contract is $486,200.00; two approved change orders (+$7,350.00 for a relocated rooftop unit curb, −$1,980.00 for a deleted water heater installation) put the contract sum to date at $491,570.00, and both appear as their own rows on the continuation sheet. Work billed on applications 1 and 2 totals $150,630.00; August adds $90,855.00 of completed work and $45,320.00 of stored material — two rooftop units on the pad and the building controllers — for $286,805.00 completed and stored, 58.3% of the contract.

Retainage at 10% is $24,148.50 on completed work plus $4,532.00 on stored material, $28,680.50 in total, leaving $258,124.50 earned less retainage. Application no. 2 certified $135,567.00, so the current payment due is $122,557.50 — exactly 90% of what was completed and stored in August — and $233,445.50 remains to finish, retainage included. That $122,557.50 is also the amount on the conditional lien waiver that travels with the application, and the third change order, still unsigned on the application date, is the one carved out as a pending change.

Retainage, stored materials and the roll-forward

Retainage is calculated on the cumulative total, not on the period, which is why the form computes it on line 4 and then subtracts what was previously certified. If your contract steps retainage down (10% until 50% complete, then 5%, for example), change the rate cell for the application where the step happens and enter line 7 from the prior application as usual — the workbook does not try to recompute history. Our retainage guide covers release at closeout.

Stored material lives in column F only until it is installed, then it moves to column E in the period it goes in. That is the whole roll-forward: after an application is approved, column D on the next one equals this application's D + E, E starts at zero, and F is whatever is still sitting on site. Do it line by line, in the same order, every month, and the sheet never drifts.

Pay application vs. invoice vs. schedule of values

• Schedule of values — the contract broken into lines with a value each. Built once, revised when change orders are approved. Schedule of values template.
• Pay application — the monthly bill against that schedule, with retainage, for work under a GC. This template.
• Invoice — a bill for a complete amount, typically direct to an owner or for service work, with sales tax and payment terms rather than a continuation sheet. Some GCs want one on top of the pay application for their accounts-payable system. Contractor invoice template.
• Change order — the signed amendment that changes line 2, and becomes a new row on page 2. Change order template.

Mistakes the workbook is built to catch

• Column C not adding to the contract sum to date — the tie-out cell turns red.
• Retainage figured on this period instead of the cumulative total.
• Billing stored material twice: once in F, again in E when installed.
• Carrying forward line 8 instead of line 6.
• Leaving a change order out of the summary so line 2 and the continuation sheet disagree.
• Sending the application without the lien waiver and stored-material backup the GC will ask for anyway.

For the full walkthrough of the format and what GCs check before they approve, read the AIA pay application guide. When you are billing several jobs a month, AIA billing software carries the schedule of values, retainage and previous applications forward for you.