AIA Billing for Subcontractors: G702, G703, and How to Submit
TLDR
AIA billing uses the G702 (Application and Certificate for Payment) and G703 (Continuation Sheet) to invoice GCs on a percentage-of-completion basis. Most GCs on commercial work require AIA format. Getting the G702/G703 right — including retainage, stored materials, and change orders — determines when you get paid.
- G702
- AIA Document G702 — Application and Certificate for Payment. The cover sheet of an AIA pay application. Shows the total contract sum, work completed to date, retainage, and the amount requested for the current period. The GC's authorized representative signs it to certify the application.
DEFINITION
- G703
- AIA Document G703 — Continuation Sheet. The line-by-line breakdown of work completed by cost code or trade. Supports the G702 totals. One row per Schedule of Values line item.
DEFINITION
- Schedule of Values
- A list of the line items (cost codes, phases, or trade work packages) that make up the total subcontract value, with a dollar amount assigned to each. Agreed between the sub and GC before work starts. The G703 is built from the Schedule of Values.
DEFINITION
- Retainage
- A percentage (typically 5-10%) withheld from each progress payment as security for the owner or GC. Held until the project reaches substantial completion or a contractual milestone. Retainage accumulates as a separate receivable on the sub's balance sheet.
DEFINITION
- Pay application
- A formal billing submission from the subcontractor to the GC covering a specific period (usually monthly). On commercial work, pay applications follow AIA format using G702 and G703 forms.
DEFINITION
“We used to find out a job was underwater when we invoiced for the last draw. Now we catch it by week three.”
“Getting our Schedule of Values right before mobilization cut our billing disputes in half. The GC's super stopped arguing percent complete when our SOV lines matched what he could actually walk and verify.”
Why AIA Format Matters on Commercial Work
If you do commercial or public work — schools, hospitals, office buildings, government facilities — you will encounter AIA billing. Almost every GC on projects above a certain dollar threshold requires it. The format is standardized enough that most GCs, bonding companies, and lenders know exactly where to look for the numbers they care about.
The practical problem is that most specialty trade subs learn AIA billing by watching someone else do it once and then figuring it out on the first real job. The forms look bureaucratic, but the underlying logic is straightforward: you estimate what percentage of each line item is done, calculate earned revenue, deduct retainage, and submit.
What trips people up is the Schedule of Values negotiation at the start, percent complete claims that don’t match field conditions, and retainage tracking that never makes it to the balance sheet.
The Schedule of Values Matters More Than the Forms
The G702 and G703 are just forms. The real document that determines your cash flow on a commercial job is the Schedule of Values — the list of line items and their dollar amounts that you negotiate with the GC before work starts.
A poorly structured Schedule of Values causes billing problems for the entire project. If your SOV has one line item for “electrical rough-in, entire building — $320,000,” you’re billing based on one broad estimate of percent complete. If the GC’s super thinks you’re 40% done and you think you’re 55% done, that’s a $48,000 discrepancy in your pay application.
Breaking the SOV into more granular line items — rough-in by floor, or by building zone — means each line item is a smaller, more verifiable increment of work. The GC’s super can walk floor 3 and agree it’s 90% complete. Fewer billing disputes, faster certification.
Stored Materials on the G703
One section of the G703 that subs miss money on: stored materials. If you have materials purchased and delivered to the job site but not yet installed, you can bill for them on the G703 under the “stored materials” column. This requires documentation (delivery receipts, material invoices) and sometimes a site visit from the GC’s super to verify the materials are on site.
For electrical subs buying switchgear or specialty equipment months before installation, stored materials billing can be a meaningful cash flow improvement. A $40,000 transformer sitting in the job site warehouse is $40,000 you can bill before it goes in the wall.
Not every GC allows stored materials billing, and some limit it to on-site storage (not off-site warehouses). Read your subcontract before assuming you can bill for stored materials.
Connecting AIA Billing to Your Job Costing
Every pay application you submit should update two things in your job costing system: billed-to-date for that job (which affects your WIP schedule) and retainage receivable (the accumulated withheld amounts).
Most subs track billings. Fewer track retainage as a separate receivable. At project closeout, a $5M subcontract at 10% retainage leaves $500,000 in withheld amounts that need active follow-up to collect. If retainage isn’t tracked as a separate line item in your job costing or accounting system, it’s invisible until you close the job — and by then, collecting it requires reconstructing a paper trail.
Your job costing software should make it simple to see, by job, how much retainage is outstanding. That number belongs on a receivable aging report alongside your regular invoice receivables.
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Q&A
What is AIA billing in construction?
AIA billing is the standard pay application format for commercial construction in the U.S., using forms developed by the American Institute of Architects. The G702 (cover page) and G703 (continuation sheet) together document the subcontractor's work completed, stored materials, retainage deducted, and amount due for a billing period. Most GCs and owners on commercial and public work require AIA format....
Q&A
How does retainage work in AIA billing?
Retainage is deducted from each pay application at the rate specified in your subcontract — commonly 5-10%. On a $100,000 pay application with 10% retainage, you receive $90,000 and $10,000 is withheld. That $10,000 accumulates in a retainage receivable account on your balance sheet. On a $500,000 job, you might have $40,000-$50,000 in retainage outstanding at project midpoint. Retainage is...
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