A pay application is the contractor’s monthly (usually) request for payment. On AIA-style contracts it is made of the G702 summary and the G703 continuation sheet, which lists every schedule of values line with work completed from previous periods, this period, materials presently stored, total to date, percent complete, balance to finish and retainage. The architect or owner’s rep reviews it, the lender may inspect, and approved amounts are paid less retainage.
Why it matters
The pay app is the GC’s main cash inflow. Errors, missing backup or missing lien waivers delay payment, and the GC usually still owes subs. Billing too much creates over billing; billing too little starves cash and creates under billing on the WIP schedule.
Worked example
On Riverside Medical Center Pay App #9 (sample data): work completed this period is $2,310,400 (about $2.31M), including the completed portion of the newly approved CO #14. Retainage at 10% = $231,040. Before the payment goes out, the lender wants lien waivers, and Apex Steel and CoreDry are still missing.
Common mistakes
- Billing percentages the architect won’t accept because they don’t match work in place.
- Forgetting to add approved change orders as new SOV lines.
- Sending the pay app without sub billings and waivers rolled up.
How os.construction handles it
We’re building pay apps that draw directly from the SOV, approved change orders, sub billings and waiver status, so the G702/G703 is assembled from the project record instead of re-keyed into a spreadsheet.