AIA Pay App Guide: How to Fill Out G702 and G703 (With Example)

On most construction projects, you get paid through a pay app, not an invoice. If the pay app is wrong, payment slows down. It might be a carry-forward error, a change order that was never approved, or a missing lien waiver. Any of these can send the application back to you, and your payment waits another cycle.

This guide walks through the AIA pay app from start to finish:

• What the G702 and G703 are
• How to set up your schedule of values
• How to fill out every line and column
• A worked dollar example
• Exactly what to submit each month so your application is approved the first time

What Is an AIA Pay App?

An AIA pay app (short for payment application) is a formal request for payment. Contractors submit one at the end of each billing period, usually monthly. It shows how much work has been completed and how much money is now due. The format comes from two standard forms published by the American Institute of Architects: the G702 and the G703.

The two forms always travel together. The G703 contains the detail, and the G702 summarizes it.

G702: Application and Certificate for Payment

The G702 is the summary page, and it answers four questions:

• What is the contract worth?
• How much of the work is complete?
• How much retainage is being held?
• How much is due this period?

It also carries the contractor's signed certification. Once the architect or owner's representative approves it, it becomes their certificate for payment.

G703: Continuation Sheet

The G703 is the detailed breakdown. It lists every line item from your schedule of values and tracks progress on each one:

• Previous billing
• Work completed this period
• Materials stored on site
• Percent complete
• Balance to finish

The G702's totals come straight from the G703. If the G703 is wrong, the G702 will be wrong too.

AIA Pay App vs a Standard Construction Invoice

A standard invoice bills a fixed amount for something delivered. A pay app bills progress against a contract. It carries forward every previous billing, holds retainage, and needs third-party certification before the money is released.

That is why lenders, architects and commercial owners ask for pay apps. Smaller residential jobs often run on simpler progress invoices. If you use both formats, a tool with multiple invoice formats lets you issue a custom invoice, a cost-breakdown invoice or an AIA-style pay app from the same project record.

Where the Pay App Fits in Your Construction Contract

The pay app isn't a standalone document. It is how the payment terms in your contract get carried out each month.

Owner–Contractor Agreement (A101) and General Conditions (A201)

The A101 is the owner–contractor agreement, and it sets the contract sum and the retainage percentage. The A201 is the general conditions document, and it sets the rules for the payment process:

• When applications are due
• How long the architect has to review them
• What backup they can request
• Grounds for withholding payment

Read both before your first billing. Your submission date, retainage rate and notarization requirement usually come from these documents.

Contractor–Subcontractor Agreement (A401)

The A401 passes the same payment terms down to your subcontractors. Your subs submit their own pay apps to you. You roll their numbers into your G703 before you submit to the owner. If a sub's billing is late or wrong, your pay app will be late or wrong as well.

Who Reviews and Certifies Your Pay App

The architect normally reviews the pay app and checks it against the actual progress on site. They then either certify it in full, adjust it, or return it. On projects without an architect, the owner's representative or the lender's inspector does this job. On loan-funded projects, the lender's draw process adds another layer of review. See how loan-based construction projects handle this.

Before Your First Pay App: Set Up the Schedule of Values

The schedule of values (SOV) divides the contract sum into billable line items. Every pay app you submit for the rest of the project will be measured against it, so time spent here pays off.

How to Break the Contract Sum into Line Items

Build the SOV from your estimate. The line items should add up exactly to the contract sum. Common structures include:

• By trade or CSI division: general conditions, sitework, concrete, framing, MEP, finishes
• By phase: foundation, rough-in, dry-in, finishes
• By building or unit: this suits multi-unit and phased work

Split large scopes into separate labor and material lines. That way you can bill materials as they are delivered and labor as it is installed. If you already estimate in a CSI format, you can build the estimate on a CSI 16 or CSI 50 cost breakdown so it flows straight into the SOV.

Front-Loading: Why Owners Push Back

Front-loading means putting too much value into early line items, like mobilization or sitework, so that you get paid ahead of the actual work. Experienced architects spot this quickly. It damages trust and often leads to a line-by-line review of every pay app after that. Assign values that reflect the real cost of each scope.

Getting the SOV Approved Before Billing

Submit the SOV for approval before your first pay app. An approved SOV prevents arguments later, because every percent-complete figure is measured against numbers everyone has already agreed to.

How to Fill Out the G703 Continuation Sheet

Always fill out the G703 first. The G702 pulls its totals from it.

Column	Name	What goes in it
A	Item No.	Line number from your SOV
B	Description of Work	Scope description matching the SOV
C	Scheduled Value	Dollar value of that line
D	From Previous Application	Work completed through the last pay app (last period's D + E)
E	This Period	Work completed during this billing period
F	Materials Presently Stored	Materials delivered but not yet installed (not included in D or E)
G	Total Completed & Stored to Date	D + E + F
G ÷ C	% Complete	Column G divided by Column C
H	Balance to Finish	C − G
I	Retainage	Retainage held on the line (used when rates vary)

Columns A–C: Item Number, Description and Scheduled Value

Copy these directly from the approved SOV, and keep them identical every month. When a change order is approved, add it as a new line. Don't quietly change an existing scheduled value.

Columns D–E: Previous Applications and This Period

Column D is the carry-forward, and it is where most pay app errors start. It must equal Column D plus Column E from your last approved pay app. It should not be what you submitted if the architect adjusted it. Column E is the work actually put in place during this period, and it should match what the architect will see on site.

Column F: Materials Presently Stored

Enter the value of materials delivered and stored but not yet installed. Once you install them, remove them from Column F and bill them in Column E. If you don't, the same materials get billed twice.

Columns G–I: Completed to Date, % Complete, Balance to Finish and Retainage

Column G is your total earned on each line, including stored materials. Percent complete and balance to finish follow from it automatically. Use Column I when retainage varies by line. For example, some contracts reduce retainage on lines that are 50% complete, or hold a different rate on stored materials.

How to Fill Out the G702 Application for Payment

With the G703 finished, the G702 is mostly a matter of carrying the totals across.

Project and Party Information

At the top of the form, enter:

• Owner, contractor and architect names and addresses
• Project name and location
• Contract date
• Application number (sequential: 1, 2, 3…)
• Period to (the last day of the billing period)

These header details must match the G703 exactly.

Lines 1–3: Contract Sum and Change Orders

Line	Entry
1. Original Contract Sum	The contract value at signing. It never changes.
2. Net Change by Change Orders	The total of all approved change orders to date, additions minus deductions
3. Contract Sum to Date	Line 1 + Line 2

The change order summary at the bottom of the G702 supports Line 2. Only include change orders that have been signed. Pending change orders belong in a separate log, not on the pay app. Track them with owner change order management and change order activity tracking, so it's clear which ones are billable.

Lines 4–6: Work Completed, Retainage and Total Earned

Line	Entry
4. Total Completed & Stored to Date	G703 Column G grand total
5. Retainage	(a) % of completed work (Columns D + E), plus (b) % of stored materials (Column F)
6. Total Earned Less Retainage	Line 4 − Line 5 total

Lines 7–9: Previous Certificates, Current Payment Due and Balance to Finish

Line	Entry
7. Less Previous Certificates for Payment	Line 6 from the last certified pay app. Enter $0 on pay app #1.
8. Current Payment Due	Line 6 − Line 7
9. Balance to Finish, Including Retainage	Line 3 − Line 6

Contractor Certification and Notarization

The contractor signs the G702 to certify that:

• The work has been completed as shown
• Previous payments have gone to the parties they were owed to

The form includes a notary block. Many owners waive notarization, but some lenders and public agencies still require it, so check your contract. Where signatures can be digital, e-signing pay apps saves you from printing, signing and scanning every month.

Worked Example: A $600,000 AIA Pay App, Step by Step

Here's the setup: a $600,000 commercial tenant improvement with 10% retainage on completed work and on stored materials.

Schedule of values:

Item	Description	Scheduled Value
1	General Conditions	$60,000
2	Sitework	$45,000
3	Concrete	$90,000
4	Framing	$120,000
5	MEP	$150,000
6	Drywall & Finishes	$95,000
7	Roofing	$40,000
	Total	$600,000

Pay App #1: First Billing Period

During the first period:

• General conditions: $10,000 billed
• Sitework: 100% complete ($45,000)
• Concrete: 60% complete ($54,000)
• Framing lumber: $18,000 delivered and stored on site, not yet installed

G703 (summary):

Item	C: Scheduled	D: Previous	E: This Period	F: Stored	G: To Date	%	H: Balance
1	60,000	0	10,000	0	10,000	17%	50,000
2	45,000	0	45,000	0	45,000	100%	0
3	90,000	0	54,000	0	54,000	60%	36,000
4	120,000	0	0	18,000	18,000	15%	102,000
5–7	285,000	0	0	0	0	0%	285,000
Total	600,000	0	109,000	18,000	127,000		473,000

G702:

Line	Amount
1. Original Contract Sum	$600,000
2. Net Change by Change Orders	$0
3. Contract Sum to Date	$600,000
4. Total Completed & Stored to Date	$127,000
5. Retainage (10% × $109,000 + 10% × $18,000)	$12,700
6. Total Earned Less Retainage	$114,300
7. Less Previous Certificates	$0
8. Current Payment Due	$114,300
9. Balance to Finish, Including Retainage	$485,700

Pay App #2: Adding a Change Order

The owner approves Change Order #1: added site drainage, +$25,000. It goes onto the G703 as a new line 8. During the period:

• General conditions: $10,000
• Concrete: the remaining $36,000, which brings it to 100%
• Framing: $72,000 installed. This includes the $18,000 of stored lumber, which moves out of Column F and into Column E.
• Change order drainage work: 50% complete ($12,500)

Work this period: $130,500. Stored materials: $0.

G702:

Line	Amount
1. Original Contract Sum	$600,000
2. Net Change by Change Orders	$25,000
3. Contract Sum to Date	$625,000
4. Total Completed & Stored to Date ($109,000 + $130,500)	$239,500
5. Retainage (10%)	$23,950
6. Total Earned Less Retainage	$215,550
7. Less Previous Certificates (Line 6 from Pay App #1)	$114,300
8. Current Payment Due	$101,250
9. Balance to Finish, Including Retainage	$409,450

Quick check: gross earned this period was $112,500 ($239,500 − $127,000). The additional retainage held was $11,250 ($23,950 − $12,700). The difference is $101,250, which matches Line 8.

Final Pay App: Releasing Retainage

When the project is 100% complete, the last progress pay app shows $625,000 completed and $62,500 held in retainage, so Line 6 is $562,500.

Once you reach substantial completion and finish closeout, submit a retainage-release pay app:

Line	Amount
3. Contract Sum to Date	$625,000
4. Total Completed & Stored to Date	$625,000
5. Retainage	$0
6. Total Earned Less Retainage	$625,000
7. Less Previous Certificates	$562,500
8. Current Payment Due	$62,500
9. Balance to Finish	$0

Doing this math by hand every month is exactly where carry-forward mistakes creep in. See how math error prevention works when the numbers calculate automatically.

Handling Change Orders, Stored Materials and Retainage

Adding Approved Change Orders to the G702 and G703

• Bill a change order only after it has been signed.
• Add each one as its own line on the G703, so its progress is tracked separately.
• Update the change order summary on the G702 so that Line 2 matches the total.
• Deductive change orders reduce Line 2 and should appear as negative line items.

When your subs' change orders pass through to the owner, keep the chain connected. Subcontractor change orders should route to the GC and then to the owner as pass-through change orders. That way, what you owe your subs and what you bill the owner always match.

Billing for On-Site vs Off-Site Stored Materials

Most contracts allow billing for materials stored on site once they have been delivered. Off-site storage, such as a supplier's yard or a fabrication shop, usually needs advance approval. It may also require proof of insurance, a bill of sale, or photos showing the materials are set aside for your project. Expect the architect to ask for delivery tickets or invoices to back up anything in Column F.

Retainage Percentages, Reductions and Release

• Percentage: set by the contract, commonly 5–10%. Many states cap retainage on public projects, and some cap it on private ones too, so check your state's rules. This matters especially on public works projects.
• Reductions: some contracts reduce retainage once the project reaches 50% complete. Use G703 Column I to track variable rates.
• Release: retainage is typically released after:
  • Substantial completion
  • Completion of the punch list
  • Delivery of closeout documents
  • Final unconditional lien waivers
  • On bonded jobs, the surety's consent

Track retainage calculation and release from day one. Also know how to prepare the final invoice and retention release before closeout begins.

The Complete Pay App Package: What to Submit Each Month

The G702 and G703 are the core of the submission, but they are rarely all that the owner or lender asks for. A complete package prevents most rejections.

Invoice, G702 and G703

Many owners' accounting departments still need an invoice alongside the pay app. The invoice total must match G702 Line 8 exactly.

Conditional vs Unconditional Lien Waivers

Lien waivers protect the owner from paying twice for the same work.

• Conditional waiver: submitted with the pay app. It only takes effect once payment is received.
• Unconditional waiver: submitted after the funds have cleared. It waives lien rights for that amount with no conditions.

The owner will usually want waivers for each progress payment and each final payment. They will often want them from your subs and suppliers too. California, Arizona, Nevada and Texas each require their own statutory waiver forms, so use the correct one:

• California lien waiver form
• Arizona lien waiver form
• Nevada lien waiver form
• Texas lien waiver form

Waivers can also be generated automatically for each payment with automated lien waiver forms.

Supporting Backup: Photos, Delivery Tickets and Sub Pay Apps

Common backup documents include:

• Progress photos
• Delivery tickets and invoices for stored materials
• Signed change orders
• Certified payroll (on public work)
• Your subcontractors' pay apps and waivers

Keep all of it attached to the project so you can pull the whole package together in minutes. Document storage helps here. Better still, generate the invoice, G702/G703 and conditional waiver as one file with an auto-generated payment application package.

Managing Subcontractor Pay Apps as a General Contractor

Collecting Sub Pay Apps Before Your Own Deadline

Set your subs' pay app deadline 5–7 days before your own submission date. That gives you time to:

• Check their percent complete against what's actually on site
• Confirm their change orders are approved
• Roll their numbers into your G703

Record each one against its contract with subcontractor billing. Keep a running subcontractor ledger that shows the contract value, change orders, amounts billed and amounts paid.

Pass-Through Costs, Reimbursements and Owner-Direct Payments

Not every dollar flows neatly through the SOV:

• Owner reimbursements: permit fees and other costs you paid on the owner's behalf. Bill these separately using owner reimbursement, and see how GCs manage client reimbursements.
• Owner-direct payments: sometimes the owner pays a vendor directly. Record it with pass-through payment tracking so the subcontract balance is reduced correctly.
• Supplier bills under a subcontract: when a lower-tier supplier bills you directly, deduct it from the sub's contract using cross-tier material payment.

When these items are handled loosely, the pay app, the sub ledgers and the owner's records drift apart. The dual headaches of employee reimbursement and subcontract deduction article covers this problem in detail.

Linking Preliminary Notices to Subcontract Payments

In states that use preliminary notices, every notice you receive tells you someone could file a lien. Before you release payment to a sub, check whether their suppliers have served notices. If they have, collect waivers from those suppliers too. Link preliminary notices to the related subcontract so nothing slips through, and see preliminary notice linking in practice.

Official AIA Forms vs AIA-Style Pay Apps vs Excel Templates

When the Owner Requires Official AIA Documents

Some owners, lenders and public agencies require the official AIA G702/G703 documents. These are licensed through AIA Contract Documents. If your contract says so, you'll need to use the licensed forms. Check this before your first submission, not after a pay app has been returned.

Where Excel Templates Break Down

Spreadsheet templates work well enough for a single pay app. Over a 10- or 12-month project, they tend to break in predictable ways:

• The carry-forward numbers stop matching the last approved application.
• A formula gets overwritten.
• A change order gets added to one tab but not another.
• Stored materials are billed twice.
• Retainage is calculated on the wrong base.

Each error is small, but any one of them can cost you a payment cycle.

What AIA-Style Pay App Software Does Differently

AIA-style pay app software follows the same G702/G703 structure that owners and architects recognize. It generates the pay app from your project data, so you don't retype numbers each month. With AIA-style G702/G703 billing:

• Previous billing carries forward automatically.
• Approved change orders flow into Line 2 and the G703.
• Retainage is calculated for you.
• The math matches every month.

10 Reasons AIA Pay Apps Get Rejected (Pre-Submission Checklist)

Math and Carry-Forward Errors

1. G703 Column D doesn't match the last approved pay app.
2. G703 totals don't match G702 Line 4.
3. Retainage is calculated wrongly: wrong percentage, wrong base, or stored materials missed.
4. Line 7 uses the amount you requested instead of the amount that was certified last time.

Unapproved Change Orders on the Bill

5. Pending or verbal change orders have been billed as if they were approved.
6. The change order summary doesn't match Line 2.

Missing Lien Waivers or Backup

7. Conditional waivers are missing from you, your subs or your suppliers.
8. There's no backup for stored materials, such as delivery tickets, invoices or photos.
9. Required signatures or notarization are missing.

Over-Billing Against Actual Progress

10. The percent complete doesn't match the site. If the architect walks the job and sees 40% where you've billed 60%, expect a reduced certification.

Before you hit send:

• G703 Column G total = G702 Line 4
• Column D = last approved D + E
• Line 7 = last certified Line 6
• Every change order is signed
• Waivers are attached
• The invoice matches Line 8

A late pay app delays payment just as much as a rejected one. Here's how to speed up slow-paying clients.

How Pay App Data Feeds Your WIP and Cash Flow Reports

Over-Billing and Under-Billing Explained

Your pay apps show what you've billed. Your job cost shows what you've spent. Comparing the two on a work-in-progress (WIP) report tells you whether each job is:

• Over-billed: you've billed ahead of the work. This is cash in hand, but it is also a liability you'll need to earn.
• Under-billed: you've done work you haven't billed yet. The work is done, but the cash hasn't arrived, and it quietly drains your working capital.

Tie your billing to job costing and a live project work-in-progress report. That way, over- and under-billing show up every month, not at year-end.

Tracking Retainage Receivable

Retainage is money you've earned but won't collect for months. Track it as its own receivable by project, so it doesn't disappear into your aging report. Receivable tracking lets you see exactly what's held on each job and when it's due.

Generate Your Pay App Package Automatically with APARBooks

APARBooks is construction accounting software built by a contractor, for contractors. Each billing period it generates a complete pay app package from your project data. The package includes:

• The AIA-style G702 and G703
• A matching invoice
• Conditional lien waivers
• Retainage and change orders calculated automatically

It also ties your pay apps to your sub ledgers, job costs and WIP report, so what you bill, what you owe and what you've spent always match.

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