AIA billing is the standardized progress billing system used across the construction industry. It was created by the American Institute of Architects and is the format most general contractors, owners, and lenders expect to see on commercial projects and larger residential jobs. The two forms at the center of it are G702 and G703.

The G702 is the Application and Certificate for Payment. It serves as the summary page showing the original contract amount, approved change orders, total completed and stored to date, retainage held, and the net amount due this period. Think of it as the cover sheet that the owner or GC reviews and signs off on before releasing payment.

The G703 is the continuation sheet. It breaks the contract into individual line items (called the schedule of values) and shows how much of each line item has been completed, how much is stored on site, and how much has been billed to date. The G703 detail feeds the summary totals on the G702.

When you submit a pay application, record the full gross billing amount before retainage as revenue. If your application covers $85,000 of work completed this month, that is $85,000 in revenue. Do not record only the net amount you expect to receive.

Retainage, typically 5% or 10%, gets recorded as a separate receivable. Using the same example with 10% retainage, you would record $76,500 in accounts receivable (the amount coming now) and $8,500 in a retainage receivable account. That retainage receivable sits on your balance sheet until the project reaches substantial completion and the owner releases it. Missing this step makes your receivables inaccurate and understates what you’re actually owed.

Change orders need their own tracking. When a change order is approved, it increases your contract value and typically shows up as a new line item or adjustment on the G703. In your books, do not lump change order revenue in with original contract amounts. Keeping them separate lets you see how much of your total project revenue came from the original scope versus additions. This matters when you are estimating future projects and want to know how accurate your original bids have been. Good construction job costing depends on this kind of detail.

Stored materials that have not been installed yet also appear on the G703. If you have purchased $15,000 in materials sitting on the job site, you can bill for them even though they are not yet in place. Record stored materials on your balance sheet as inventory or work in progress, then move them to cost of goods sold as they get installed.

For software, QuickBooks Online can handle AIA billing with the right account structure, but it takes discipline. You will need to configure projects correctly, create accounts for retainage receivable, and manually track your schedule of values against each application. Construction-specific platforms like Buildertrend, Procore, or Foundation can generate actual G702 and G703 forms and sync with QBO, which saves time and reduces entry errors. If you are submitting pay applications regularly, dedicated construction software pays for itself quickly.

The biggest mistake contractors make is recording only the cash received instead of the full billing amount. This understates revenue, makes receivables inaccurate, and throws off your true profit margins by project. Your books should reflect what you have earned and what you are owed, not just what has hit the bank account. If your AIA billings have been recorded inconsistently or you are behind on getting your books set up for project-based work, a bookkeeping partner who understands construction can build the right account structure and make sure each pay application flows through correctly from the start.