Progress Billing for Contractors: AIA G702 and G703 Forms Explained

Progress billing is how most commercial construction projects are invoiced — you bill the owner incrementally as the work progresses rather than in one lump sum at the end. The AIA G702 and G703 forms are the standard format for this in the US commercial construction industry. If you work with general contractors, developers, or public agencies, you will almost certainly need to use them.

What Is Progress Billing?

Progress billing allows a contractor to invoice a portion of the contract value as work is completed. Instead of waiting until the project is finished to get paid, you invoice monthly (or at defined milestones) for the work done that period. This is critical for cash flow on longer-duration projects — waiting until completion on a 12-month, $2M project to invoice would be financially devastating for most contractors.

The AIA G702: Application and Certificate for Payment

The G702 is the cover sheet for a progress billing submission. It summarises: the total original contract sum, any approved change orders (additions or deductions), the revised contract sum, work completed and stored materials to date, the amount previously billed, the current payment application amount, and the retention amount being held. The owner or their lender signs the G702 to approve payment.

The AIA G703: Schedule of Values

The G703 is the supporting schedule behind the G702. It breaks the contract down into individual line items (divisions of work), each with a scheduled value. For each period, you indicate the percentage or dollar amount of each line item completed. This transparency is what makes the format trusted by owners and lenders — they can see exactly what has been done and validate the billing.

How to Tie G702/G703 Billing to Your Bookkeeping

Every approved G702 billing should be entered as an invoice in your accounting system against that project. The retention amount is not cash you receive — record it in a Retention Receivable account separate from your regular AR. When the project is complete and retention is released, that balance transfers to AR and is collected. Failure to track retention separately is one of the most common construction bookkeeping errors.

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