Construction Progress Billing: AIA Style Invoicing Guide

Construction projects use progress billing — invoicing based on percentage of work completed rather than one final payment.

Schedule of Values

Before work starts, create a Schedule of Values (SOV) breaking the contract sum into line items: foundation, framing, electrical, etc.

Progress Billing Calculation

For each billing period:

• Work completed this period (per SOV)
• Plus: Approved change orders
• Less: Retainage (typically 5–10%)
• Less: Previous payments
• Equals: Current payment due

Retainage Explained

Retainage (retention) is a percentage withheld until project completion to ensure contractor finishes punch list items. Standard: 10% until 50% complete, then 5%.

Change Orders on Progress Bills

Each approved change order adds to the contract sum and appears as a separate SOV line item. Never perform extra work without a signed change order.

AIA G702/G703 Forms

Standard construction industry forms for payment applications. Even without formal AIA forms, follow the same logic: SOV, percent complete, retainage, net due.

Create Construction Invoices

Build detailed progress invoices with line items for each SOV category, retainage, and net payment due.