AIA Billing, Schedule of Values & Retainage

Schedule of values (SOV)

At the start, you break the contract price into line items (the SOV). Each progress bill reports % complete per line, so the owner can see what they're paying for.

AIA-style billing

Many projects bill monthly on AIA G702/G703 forms (or similar): G702 is the summary application for payment; G703 is the detailed continuation (the SOV with this period's progress). The owner/architect reviews and certifies it.

Retainage

The owner withholds retainage (commonly 5–10%) from each payment until the job is complete — an incentive to finish. You, in turn, often hold retainage from your subs. Track retainage receivable (owed to you) and payable (you owe subs) separately; it's real money that hits cash flow at closeout.

Why precision matters

Sloppy SOVs and billing create cash-flow gaps and disputes. Bill accurately and on time — it's how you stay funded through the job.

Going Deeper (Intermediate)

Progress billing on commercial work runs on three documents:

• Schedule of Values (SOV) — the contract price broken into line items.
• AIA G702/G703 pay application — bills the % complete of each line this period.
• Retainage — the owner withholds 5–10% of each payment until completion as security.

You bill monthly, the architect/owner approves, and you're paid less retainage 30+ days later.

Advanced / Pro-Level

The cash-and-risk game inside billing:

• Front-loading the SOV (loading value into early line items like mobilization) improves early cash flow — but it's scrutinized and, taken too far, is unethical/contractually risky.
• Stored-materials billing lets you bill for materials on site but not yet installed (with proof and sometimes insurance).
• Retainage receivable accumulates into a big number — often your entire profit — so track it and push for retainage reduction at substantial completion.
• Each draw typically requires lien waivers (conditional/unconditional) and sometimes certified payroll as backup. Miss the backup, miss the check.

Practice Challenge

You've completed $200k of an SOV line this month under 10% retainage. What do you bill and what do you actually receive? (Answer: bill $200k, retainage withholds $20k, so you receive $180k now; the $20k joins retainage receivable until release.)

In Practice

Bill late or with a sloppy schedule of values and the owner kicks back your pay app — now you're financing the job another month. Accurate, on-time AIA billing keeps cash flowing.

Common Mistakes to Avoid

• Billing late or inaccurately
• Front-loading the SOV unfairly (it gets rejected)
• Losing track of retainage owed to you

Takeaway: Bill accurately and on time — it's how you stay funded through the job.

Educational content — not legal, accounting, or licensing advice. Rules vary by state and change; verify with the licensing board and a CPA.