Your first payment application is due, but the owner wants the contract broken into reviewable portions of work. Build the schedule of values before reporting progress: assign each portion a stable identifier and a dollar value, then reconcile the total to the agreed contract sum. Those lines become the basis for explaining what changed between payment applications.
Keep the billing allocation separate from the internal cost budget. A line can include labor, materials, overhead, and margin under your agreed pricing, so its scheduled value does not establish what you spent. The example below uses an original, simplified worksheet rather than reproducing a licensed payment form.
Allocate the agreed contract sum before billing
AIA Contract Documents describes G703 as the continuation sheet that supports G702 by breaking the contract sum into portions of work. Its G702 instructions connect that detail to completed and stored work, retainage, previous certificates, and the current payment request. Use the form and submission process required by your contract.
Start with the executed scope and the owner’s required breakdown. Give a billing reviewer enough detail to confirm progress without creating lines no one can substantiate. For example, separate equipment procurement from installation when the agreement treats stored materials as a distinct billing event. Assign one person to maintain the allocation and another authorized person to accept it under the project process.
Record company, project, contract ID, line ID, description, scheduled value, and accepted version (including the application where it took effect). Map each billing line to the relevant internal cost codes without forcing a one-to-one relationship. Your construction job cost report answers what the work costs; the billing schedule answers how the agreed contract value is allocated for payment review.
A worked allocation and progress calculation
Assume a hypothetical US-dollar contract of $500,000 with no changes, taxes, credits, or disputed items. The owner has accepted the allocations below and allows the illustrated stored-material billing. Progress is supported by project evidence at one cutoff. Amounts represent billing values, not measured construction costs or a recommended pricing structure.
| Portion of work | Scheduled value | Installed to date | Stored, not installed | Total supported to date | Balance of line |
|---|---|---|---|---|---|
| Site work | $100,000 | $80,000 | $0 | $80,000 | $20,000 |
| Structure | $200,000 | $80,000 | $20,000 | $100,000 | $100,000 |
| Mechanical and electrical | $150,000 | $30,000 | $15,000 | $45,000 | $105,000 |
| Finishes | $50,000 | $0 | $0 | $0 | $50,000 |
| Total | $500,000 | $190,000 | $35,000 | $225,000 | $275,000 |
The allocations total $500,000. Supported completed and stored value is $190,000 + $35,000 = $225,000, or 45% of the contract value. The $275,000 balance is the remaining billing value before considering retainage. It is not a cost-to-complete estimate; the remaining work can cost more or less than its allocated selling value.
For a separate payment calculation, assume the contract calls for a hypothetical 5% retainage on all $225,000 and that previous certificates total $120,000 net of retainage. Cumulative retainage is $11,250; supported value less retainage is $213,750. The current request under these assumptions is $213,750 - $120,000 = $93,750. This example does not establish a lawful rate, a certification decision, or a cash receipt date.
A reviewer should be able to open the evidence behind each reported amount. For site work, that might be an accepted quantity record; for stored equipment, it may include the documents required by the agreement. Record which evidence supports which application so a later attachment cannot be mistaken for the basis of an earlier request.
Move stored materials into installed work once
Assume $10,000 of the structure’s $20,000 stored balance is installed in the next period and there is no other progress. Installed value becomes $90,000, stored value becomes $10,000, and total supported value remains $100,000. Adding the installed amount without reducing the stored balance would overstate that line by $10,000.
AIA’s G703S instructions describe this transfer from stored materials to work completed. They also distinguish presently stored materials from completed work carried forward. Use the instructions for the specific form your contract requires, and keep a material reference that survives the transfer.
Version changes without rewriting prior applications
If a hypothetical approved change adds $25,000, the revised contract sum becomes $525,000. Keep the authorization and add an identifiable change line or use the agreed revised allocation. Reconcile the new total before the next application. Pending proposals stay visible outside the accepted contract total until the authorized process determines their treatment.
Do not reassign a past billing line ID to a new scope description. Preserve the original accepted allocation, change reference, effective application, and revised value so a reviewer can reconstruct the movement. Where a correction affects an earlier application, document the correction route with the billing owner instead of altering a frozen copy and losing the difference.
Retain submitted, reviewed, and accepted amounts as distinct versions. The amount requested can differ from the amount certified or accepted, and neither proves that money arrived. Use the construction cash flow forecast to place supported receipts on expected cash dates after the billing status is known.
Check the schedule before submission
- Confirm that accepted line values reconcile to the executed contract plus the changes included in this application; explain every difference.
- Trace a stored-material transfer to the same item in the prior application so installation cannot create a duplicate amount.
- Retrieve the prior accepted application and show that its cumulative totals carry forward without a hidden reset.
- Identify the evidence and authorized reviewer for every reported progress amount that changed this period.
Keep rejected or unsupported amounts in an exception record with their owner and next action. Dropping them from the submitted schedule may be appropriate under the agreed process, but dropping the history makes the next application harder to prepare. A disputed amount needs a status and a reference rather than an unexplained adjustment to percentage complete.
Where Permute fits in billing evidence
Permute sells the context layer between business data and AI tools. We can scope a billing review around permitted Excel schedules, QuickBooks or Sage records, and supporting documents in Google Drive. Project, contract, and billing-line mappings retain their source references so a changed description does not create an assumed match.
We apply your declared definitions of accepted contract value, supported progress, and retained amounts to those records. A billing coordinator can ask Claude or ChatGPT which lines changed and inspect the evidence under current permissions. The rules need an owner, including a rule for unresolved mappings and records refreshed after the cutoff.
Explore the evidence behind a billing line
Start with one permitted schedule and the records supporting its latest change.
Keep payment and accounting decisions with authorized owners
We read the permitted inputs for this reporting workflow; we do not submit or certify a payment application or write its result into your system of record. We do not choose contractual entitlements or accounting treatments. Contract administrators and finance owners determine the applicable form, eligible stored materials, retainage, and revenue-recognition basis.
A billing progress percentage can differ from progress used in an approved accounting method. The construction WIP report addresses the separate relationship between earned revenue and billing. Preserve both definitions so a payment worksheet cannot become an unreviewed accounting policy.
Make each payment period reconstructible
A schedule of values allocates the contract sum to identifiable portions of work and supports period-by-period payment review. Reconcile its total, carry prior supported amounts forward, and move stored materials into installed work without duplicating value. Preserve accepted changes and the evidence behind each application. Treat payment approval and cash collection as separate events.
Review one payment-application handoff
Bring an accepted allocation, a later application, and their supporting records to examine where evidence or definitions diverge.
Questions about schedule of values
Can a lump-sum contract still need several billing lines?
Yes, when the contract or owner’s submission process calls for a breakdown of the lump sum. Agree the detail before the first application and keep the total tied to the executed amount. A single contract price does not establish which breakdown the reviewer will accept.
Must billing lines match cost codes?
They can map to cost codes without sharing the same structure. Billing lines allocate contract value, while cost codes classify internal costs. Keep a documented crosswalk when a billing line spans several codes, and preserve the original references.
Is this worksheet an AIA form?
No. It is an original example of allocation and billing arithmetic. Use a licensed AIA document if your agreement requires it, together with the instructions for that edition; this worksheet does not replace that document.