What is a schedule of values?
A schedule of values (SOV) breaks the contract sum into line items: by trade, by phase or by area. Each line has a scheduled value, and the lines add up exactly to the contract sum. You submit it at the start of the job, the owner, architect or lender approves it, and every progress billing after that is measured against it.
What is a pay application?
A pay application (pay app) is the request for a progress payment. For each line on the schedule of values it shows what was billed before, the work done this period, materials stored on site, the total completed, the percent complete, the balance to finish and the retainage. A summary then works out the amount due: everything earned so far, less retainage, less what you've already billed.
People call this "AIA billing" because many contractors use the AIA G702 and G703 forms for it. This template does the same math in its own layout.
This is not an AIA document
AIA, G702 and G703 are trademarks of The American Institute of Architects, and the official forms are licensed from the AIA. This template is our own progress-billing format. Some owners, lenders and architects require the official AIA forms. If your contract names them, use them. Plenty of owners on smaller jobs accept a clear pay app in any format, but ask before you send the first one.
How to build a schedule of values
Start from your estimate. Group costs the way the work will happen and be checked: by trade or phase, in roughly the order it gets built.
Make lines you can measure. Split big trades so progress is easy to judge: plumbing rough-in and plumbing finish, not just plumbing.
Spread overhead and profit honestly. Carry markup through the lines, or show general conditions on their own line if the contract allows. Don't front-load early lines to get paid sooner; owners and lenders look for it and can reject the schedule.
Make it add up. The lines must total the contract sum exactly. When a change order is approved, add it as its own line.
How to fill in a pay application
Contract and retainage. Enter the original contract sum, net approved change orders, and the retainage percentages from your contract (work and stored materials can differ).
Previous applications. For each line, the total billed on earlier pay apps. On your first application this is blank.
This period. The dollar value of work put in place since the last application. If you think in percent: percent complete × scheduled value, minus previous.
Materials stored. Material delivered and stored but not installed yet. Owners usually want backup: invoices, photos, and proof of insurance for off-site storage.
Check the lines. Nothing should be over 100%. The tool flags lines billed past their value and a schedule that doesn't match the contract sum.
Previous payment requests. The earned-less-retainage figure from your last application. The amount due is worked out from it.
Download, sign, attach backup. Send the PDF with whatever your contract asks for, such as lien waivers. Next period, "Start next pay app" rolls this period into previous for you.
How retainage works
Retainage (or retention) is a percentage held back from each progress payment as security that the job gets finished, punch list included. It's paid out at substantial or final completion, or at milestones the contract sets.
The rate and the rules come from your contract and from state law. 5% and 10% are common rates, many states cap retainage (especially on public work) and set deadlines for releasing it, and some contracts reduce it once the job is half done. Check your contract and your state's retainage and prompt-payment rules before you rely on any default.
| Line | Scheduled value | Previous | This period | Stored | Completed and stored | Retainage |
|---|---|---|---|---|---|---|
| Framing | $42,000.00 | $21,000.00 | $21,000.00 | $0.00 | $42,000.00 | $4,200.00 |
| Roofing | $16,500.00 | $0.00 | $8,000.00 | $4,200.00 | $12,200.00 | $1,220.00 |
Pay application example
Application #3 on a $224,000 addition with one $4,000 change order, at 10% retainage on work and stored materials. Load the example in the tool above to see every line.
| Line | Amount |
|---|---|
| Contract sum to date | $228,000.00 |
| Completed and stored to date | $141,550.00 |
| Total retainage (10%) | $14,155.00 |
| Total earned less retainage | $127,395.00 |
| Less previous payment requests | $69,840.00 |
| Amount due this application | $57,555.00 |
| Balance to finish, including retainage | $100,605.00 |
Common pay application mistakes
- A schedule of values that doesn't add up to the contract sum.
- Billing ahead of the work in place, or past 100% on a line.
- Stored materials with no backup, or off-site storage the owner never agreed to pay for.
- The wrong retainage base: check whether stored materials carry the same percentage as work.
- A "previous payment requests" figure that doesn't match the last application.
- Moving money between lines without a change order or the owner's OK.
Common questions
What is a schedule of values?
An itemized breakdown of the contract sum into lines by trade, phase or area, each with a scheduled value. The lines add up to the contract sum, and progress billing is measured against them.
What does an SOV look like?
A table with one row per line item: item number, description and scheduled value, plus columns for previous billing, this period, materials stored, completed to date, percent complete, balance to finish and retainage. The template above shows a filled-in example.
What does AIA billing mean?
Progress billing in the format of the AIA G702 and G703 forms: a summary page that works out the amount due and a continuation sheet with the schedule of values. People use the term for that style of billing in general. This template does the same math in its own format.
What is the difference between AIA G702 and G703?
G702 is the summary: contract sum, change orders, work completed, retainage, previous payments and the amount due. G703 is the continuation sheet with one row per schedule of values line. This template puts both parts in one document, in its own layout.
Is a pay application the same as an invoice?
It does the same job, asking for payment, but it shows progress against the whole contract line by line, with retainage. Many owners treat the approved pay app as the invoice; some want a separate invoice too. Ask what yours needs.
What is typical retainage in construction?
It depends on the contract and the state. 5% and 10% are common, many states cap it (especially on public jobs), and some contracts lower it after the job is half done. Use the rate in your contract.
When should retainage be paid?
When the contract says: usually at substantial or final completion, once the punch list and closeout paperwork are done. Many states set deadlines for releasing retainage after completion, so check your state's rules if it's held too long.
Can QuickBooks do AIA billing?
QuickBooks Online offers progress invoicing on some plans, which bills a percentage or amount of an estimate. On its own it doesn't produce a pay application with a schedule of values, retainage and stored materials, so contractors usually pair it with another tool. Construction Company Software builds AIA-style pay apps and connects to QuickBooks Online on the Whole Job plan.
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