AIA G702 and G703: A GC's Guide to Pay Applications

TL;DR: AIA G702 is the one-page Application and Certificate for Payment summarizing contract sum, change orders, work completed, retainage, and current amount due; AIA G703 is the multi-page Continuation Sheet with line-item schedule of values backing up the G702. GCs should confirm application numbers are sequential, Line 1 matches the original contract, and Line 2 only includes executed change orders before the architect certifies.

If you're running commercial construction projects, you've seen the AIA G702 and G703 forms. If you've tried filling them out from scratch without help, you've probably sworn at them too. This guide walks through what each form does, what each field means, and how to actually run a clean pay application cycle as a general contractor.

What Are AIA G702 and G703?

The American Institute of Architects (AIA) publishes a family of standardized contract and administration documents used on commercial construction projects. Two of the most widely used are:

• AIA G702, "Application and Certificate for Payment": the cover sheet of a pay application. It summarizes the contract sum, payments to date, current amount due, and certification by the architect.
• AIA G703, "Continuation Sheet": the line-item detail that backs up the G702. It shows each work item, its scheduled value, what's been completed, and what's being billed this period.

Together, the G702 and G703 form a complete pay application. The G702 is the one-page summary; the G703 is the multi-page breakdown. When an owner looks at whether to approve a payment, they're reading both.

The G702: Section by Section

The G702 is a single page divided into several blocks. Here's what each one contains.

Project Information Block

Top of the form. You fill in:

• Application number (sequential: 1, 2, 3 through the project)
• Period to (the cutoff date for work included)
• Project name and number
• Contractor and owner names and addresses
• Architect's name and address
• Via (usually the architect's name again, since they route the payment)

What to check: application numbers are sequential and not skipping or duplicating. Period-to dates align with the billing cycle you agreed to with the owner.

Line 1: Original Contract Sum

The original contract value agreed between you and the owner at signing. This number stays fixed for the life of the project.

Line 2: Net Change by Change Orders

The total net value of approved change orders to date. Positive if the contract grew, negative if scope was removed. This number updates every pay application as new change orders are approved.

What to check: every change order included has been formally executed. Unapproved change orders don't belong in this line even if the owner verbally agreed.

Line 3: Contract Sum to Date

Line 1 plus Line 2. The current total contract value including all approved changes.

Line 4: Total Completed and Stored to Date

Pulled directly from the G703's "total completed and stored" column. This is the cumulative value of work actually performed and materials delivered, including retainage.

Line 5: Retainage

Two sub-lines:

• 5a. Retainage on completed work: the percentage (usually 5% or 10%) withheld from work already completed.
• 5b. Retainage on stored materials: retainage on materials on site but not yet installed.

What to check: retainage percentages match the contract. Some contracts reduce retainage at substantial completion or a certain percentage complete. Verify you're applying the right rate for each line item's current status.

Line 6: Total Earned Less Retainage

Line 4 minus Line 5. This is the cumulative amount the contractor is entitled to receive up through this pay application.

Line 7: Less Previous Certificates for Payment

The total amount of previous pay applications that have been certified and paid.

Line 8: Current Payment Due

Line 6 minus Line 7. The amount requested in this pay application.

This is the number the owner writes a check for. Everything above is showing the math that produces Line 8.

Line 9: Balance to Finish Including Retainage

Line 3 minus Line 6. The remaining work value plus held retainage.

Certification Section

At the bottom, the contractor certifies under oath that the work represented has been completed in accordance with the contract and that all payments received have been disbursed to subs and suppliers. This is a sworn statement. Don't sign something that isn't accurate.

The G703: Line-Item Schedule

The G703 is the continuation sheet that backs up Line 4 of the G702. Each row represents a line item from the schedule of values, and each column tracks progress on that item.

Column A: Item Number

Sequential numbering of line items (1, 2, 3, etc.).

Column B: Description of Work

What the line item is. For example: "Sitework," "Concrete Foundations," "Structural Steel," "Electrical Rough-In."

The level of detail here matters. A 30-line schedule gives you flexibility in billing against completion; a 5-line schedule makes progress measurement blunt and disputes more likely.

Column C: Scheduled Value

The contract value assigned to this line item in the schedule of values. The sum of all Column C values should equal the current contract sum to date.

Column D: Work Completed From Previous Application

The cumulative value completed on this line item through the end of the last pay application period.

Column E: Work Completed This Period

The value of work completed on this line item during the current billing period (between the last pay app and this one).

Column F: Materials Presently Stored

Value of materials on site or in a bonded warehouse that haven't yet been installed. These are billable if the contract allows stored materials and you have proper documentation (bill of lading, bonded storage receipt).

Column G: Total Completed and Stored to Date

Sum of Columns D, E, and F. The cumulative value for this line item.

Column H: Percent Complete

Column G divided by Column C. Shows how far along this line item is.

Column I: Balance to Finish

Column C minus Column G. The remaining value.

Column K (sometimes J): Retainage

Retainage withheld on this line item. Often calculated at 10% of Column G (or a reduced rate for completed items on some contracts).

How to Prepare a Clean Pay Application

Here's the process most experienced project managers follow:

Step 1: Update the G703 First

Start with the line-item sheet. For each row:

1. Pull Column D forward from last month's G703 (your prior period cumulative).
2. Calculate Column E based on this period's work completed (walk the site, photograph, measure quantities, sync with foremen).
3. Add any materials stored this period to Column F.
4. Sum D + E + F into Column G.
5. Recalculate H (percent complete) and I (balance to finish).
6. Calculate retainage on this line item.

Step 2: Roll the G703 Totals Into the G702

Total Column G at the bottom of the G703 and carry it into G702 Line 4. Sum retainage into G702 Line 5.

Step 3: Update the G702 Math

Verify:

• Line 3 reflects current contract value including change orders.
• Line 6 = Line 4 - Line 5.
• Line 7 = sum of all previous Line 8 values.
• Line 8 = Line 6 - Line 7. This is the amount due.
• Line 9 = Line 3 - Line 6. This is the remaining balance.

Step 4: Attach Supporting Documentation

Owners and architects typically want to see:

• Lien waivers from the previous period's payments (conditional final and unconditional interim are standard).
• Updated schedule of values if change orders affected line items.
• Stored materials documentation (receipts, bills of lading, insurance, bonded storage).
• Certified payroll (on public or prevailing wage projects).
• Subcontractor compliance proof (active COIs, W-9s on file).

Step 5: Submit and Certify

Sign the certification at the bottom of the G702. This is a legal statement that the work is accurate and payments have flowed down the chain. Route to the architect (who certifies and forwards to owner) and expect payment within the contract's payment terms, typically 30 days.

Common Pay App Mistakes GCs Make

1. Skipping lien waivers. Owners increasingly refuse to pay without matching lien waivers from the previous pay period. Build the waiver collection into your AP workflow, not the pay app workflow.
2. Over-billing a line item. Billing 80% complete when you're actually 60% complete creates front-loaded cash flow but is fraud. It also creates a dispute when the owner walks the site.
3. Missing change orders. If a change order was approved but not yet included in the pay app, you leave money on the table. Track change orders on a log and reconcile every month.
4. Wrong retainage calculation. Some contracts reduce retainage at substantial completion, or require different retainage rates on materials vs labor. Read the contract, don't assume 10% across the board.
5. Not collecting sub compliance before paying subs. If you pay a sub who doesn't have a current COI, you're exposed. Your own pay application certifies that everyone downstream has been paid, but the flip side is that you should only pay subs who are compliant.

How PaperBoss Fits In

PaperBoss isn't pay application software, but it solves a piece of the pay app workflow that causes real problems: verifying that every sub you're about to pay is currently compliant. Before you release a payment to a sub, PaperBoss tells you whether their COI, W-9, and other required documents are current. If a sub's paperwork is expired, you can flag it and hold payment until they provide updates, which prevents the scenario where you pay an uninsured sub and discover the gap later.

For the pay application itself, most GCs use dedicated construction accounting software (Sage 300 CRE, Viewpoint Vista, Foundation, QuickBooks Contractor) to generate G702 and G703 forms. PaperBoss handles the compliance side and integrates with that workflow via CSV export.

Frequently Asked Questions

Do I need to use AIA forms specifically?

No. AIA G702 and G703 are standards but not legally required. Many contracts specify "AIA G702/G703 or equivalent," which means a comparable format is acceptable. Some GCs use custom pay application templates built in Excel. The content requirements are similar regardless of form name.

Can I bill for stored materials before they're installed?

Usually yes, if the contract allows it. Most AIA-based contracts permit billing for stored materials when supported by documentation (bill of lading, insurance, bonded storage). Some owners disallow stored materials entirely. Check your contract.

What if the architect rejects my pay application?

Architects certify pay applications before owners pay. If the architect rejects or reduces your pay app, they should explain what needs to change. Common reasons: over-billing a line item, missing documentation, unapproved change orders included. Revise and resubmit.

How often do I submit pay applications?

Most commercial contracts specify monthly billing cycles with a specific cutoff date. Some contracts allow biweekly or at milestone completion. Check your contract for billing period requirements.

Is retainage released all at once at the end?

Not always. Many modern contracts release retainage incrementally (for example, 50% at substantial completion and the remaining 50% at final completion). Some states regulate retainage release by statute. Read your contract and know the applicable state law.

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This article is for educational purposes only and does not constitute legal or accounting advice. Consult a construction attorney or CPA for specific contract and pay application questions.