Construction Progress Billing: Schedule of Values, Retainage and AIA Invoices

On construction projects that run for weeks or months, you don't wait until the end to get paid. Progress billing lets you invoice for the work completed in each period, usually monthly, against an agreed breakdown of the contract.

The schedule of values

Before the first bill, you and the client (owner or general contractor) agree a schedule of values (SOV): the contract price broken into line items, each with its own value.

Item	Scheduled value
Mobilization	$8,000
Site work and excavation	$24,000
Foundations	$46,000
Framing	$62,000
Roofing	$28,000
Rough plumbing and electrical	$38,000
Drywall and finishes	$44,000
Total contract	$250,000

Each progress invoice reports the percentage complete on each line.

Retainage

The client usually holds back a percentage of each payment, commonly 5–10%, as retainage (or retention). It's released when the job is substantially complete or finished and signed off. Some US states cap retainage on certain projects, particularly public works, and many require its release within a set time after completion.

A worked progress invoice

Pay application #3, period ending 31 August:

Item	Value	Previous %	This period %	Total %	Completed to date
Mobilization	$8,000	100%	0%	100%	$8,000
Site work	$24,000	100%	0%	100%	$24,000
Foundations	$46,000	60%	40%	100%	$46,000
Framing	$62,000	0%	50%	50%	$31,000
Roofing	$28,000	0%	0%	0%	$0
Rough MEP	$38,000	0%	10%	10%	$3,800
Drywall and finishes	$44,000	0%	0%	0%	$0
Total	$250,000				$112,800

• Completed to date: $112,800
• Less retainage (10%): −$11,280
• Earned less retainage: $101,520
• Less previous payments: −$53,640
• Amount due this application: $47,880

The previous payments figure is what was certified on applications #1 and #2: $59,600 of work completed, less 10% retainage. Change orders are added as new lines with their own values once approved.

AIA G702 and G703

On many US commercial projects, progress billing uses the AIA G702 (application and certificate for payment) and G703 (continuation sheet, which is the SOV table above) forms, or a close equivalent. If your contract specifies them, use them. For smaller residential and light commercial jobs, a clear invoice showing the same information is usually accepted.

Change orders

Never bill for extra work that isn't approved. When a change order is signed:

• Add it to the SOV as a new line (e.g. "CO-004: additional window openings: $6,200")
• Bill its progress like any other line

Unapproved extras on a pay application are the most common reason the whole application gets delayed.

Lien waivers

In the US, owners and GCs often require lien waivers with each pay application: conditional (effective once payment clears) for the current amount and unconditional for previous payments. Learn your state's forms and deadlines; mechanic's lien rights are powerful but have strict notice requirements, often starting when you first supply labor or materials.

Using the generator for simpler progress invoices

For small jobs that don't need AIA forms, you can bill progress on a simple invoice:

Description	Amount
Bathroom renovation, contract $18,000: progress to 31 Aug (demolition, plumbing rough-in, tiling 50%): 55% complete	$9,900.00
Less previous invoice INV-0305 (deposit, 20%)	−$3,600.00
Less retainage 5%	−$495.00
Due this invoice	$5,805.00

Enter the retainage as a discount (fixed amount) and the previous payment in "Already paid", or itemize them as above in the description.

Cash flow tips

• Submit pay applications on the exact day the contract specifies. Late submission often means waiting for the next cycle.
• Keep photos and daily logs to support your percentages.
• Chase retainage actively at completion. It's easy to forget and it's often your profit.