The architect returns your pay application on the 3rd with one note: line 7’s previous billing does not match the certified amount from last month. The correction takes ten minutes. Getting it back through review takes eleven days, and the draw misses the owner’s payment cycle.
A lot of billing delays look like that. The work was done and the owner intends to pay, but something on the application does not reconcile to the record the reviewer is holding. This guide covers the checks that catch those problems before submission: progress bills, change orders, time-and-material tickets, and what to do when the owner pays less than you billed.
Before you send the bill: run the totals through the pay application calculator to confirm retainage and the current payment due.
Start from the version the owner accepted
Before drafting the next application, pull two documents: the last application in the version the owner accepted (not the one you first submitted, if it was revised), and the current schedule of values. The new draft should carry forward the accepted prior billing exactly and show only the work supported for this period.
On projects using AIA G702 and G703, the continuation sheet supports the application line by line, and change orders can be listed as lines on G703 and summarized on G702 (AIA’s payment application guide). Follow the forms and instructions your contract specifies.
Review the lines that usually change
| Line | Check before submitting |
|---|---|
| Work completed this period | Confirm the amount with the PM and reconcile it to cumulative progress |
| Stored materials | Confirm the contract permits billing them and the support meets the owner’s instructions. When stored materials are installed, move them to completed work instead of billing them again |
| Change orders | Include approved scope on the correct line and check whether any of it was billed before |
| Retainage | Apply the contract’s rate and basis, and compare the resulting balance with the prior application |
| Previous billing | Tie each line to the accepted prior application |
Work back from the owner’s cutoff
Many owners and lenders process applications on a fixed monthly cycle, and some ask for a draft (often called a pencil copy) before the formal submission. Find out the actual dates for each job: when the draft is due, when the architect reviews, when the formal application must arrive, and when the owner pays. Put those on a billing calendar by job. An application that is right but arrives a day after the cutoff can wait a full month, which costs more than most line-item errors. If the owner takes a pencil copy, send one. Corrections made on the draft do not cost you a review cycle.
Save the submitted version and the owner’s response. If it comes back, record the line and reason, assign it to the person who can fix it, and keep the accepted revision with the billing history. If the same line keeps coming back, that tells you what support the reviewer expects to see.
Bill approved change orders
A change order gets signed the day after your application goes out. Before adding it to the next one, check the approval date, the work completed in the new period, and whether any part has already been billed. A signed change establishes the authorized scope and amount. The contract and billing instructions determine what you can bill now.
| Check | Evidence to keep |
|---|---|
| Scope and amount approved | Signed change order, job, effective date |
| Billing line identified | Schedule of values line and owner’s billing instructions |
| Amount supported for this period | Work completed, or other evidence the contract requires |
| Prior billing accounted for | Previous approved application, credits, corrections |
| Retainage calculated | Applicable terms and amount withheld |
The expensive failure is approved work that never gets billed. Each month, compare signed changes against the draft application. For any approved change that is not on the draft, record why: the work has not been performed yet, the supporting records are missing, or someone needs to add it to the schedule of values. Give each reason an owner. After you submit, record which changes the application included.
Turn time-and-material tickets into bills
A foreman sends a ticket for extra work. Before billing, confirm which job and scope it belongs to and whether the contract requires a signature or separate authorization. The customer should be able to check the hours and materials against the field record, so keep the ticket with the invoice.
What the ticket needs to support:
- Labor: date, work performed, crew or labor category, hours, and the agreed rate.
- Materials and equipment: quantity, supporting receipt or equipment log, and any agreed markup.
- Authorization: the work directive or contract reference and who signed it.
- Billing history: any invoice or application that already included part of the ticket.
For U.S. federal contracts that incorporate FAR 52.232-7, the clause describes approved vouchers, labor categories, and supporting documentation (FAR 52.232-7 on Acquisition.gov). On other projects, the signed agreement sets the requirements.
Worked example: one T&M ticket (illustrative)
The contract sets a journeyman rate of $85 per hour, materials at cost plus 10%, and a daily rate of $375 for a skid steer.
| Item | Calculation | Amount |
|---|---|---|
| Labor | 3 workers × 8 hours × $85 | $2,040 |
| Materials | $1,150 at cost | $1,150 |
| Markup on materials | 10% of $1,150 | $115 |
| Equipment | 1 day × $375 | $375 |
| Ticket total | $3,680 |
Check: $2,040 + $1,150 + $115 + $375 = $3,680.
Now suppose the owner’s representative signed for 24 hours but disputes the $85 rate, arguing the work was laborer scope at a lower rate. Keep the hours and the rate question separate. The 24 hours are agreed. The rate goes to the PM as a specific decision, with the contract’s rate schedule attached. Billing should not guess.
Keep unbilled tickets visible
Tickets that are complete in the field but missing a signature, a rate, or a receipt are revenue you have earned and not billed. Review them weekly. Give each one a next action and a deadline. When the invoice goes out, record its reference on the ticket so a resubmission cannot bill the same work again.
When the owner pays less than you billed
An owner pays $92,000 against a $100,000 approved application and lists an $8,000 backcharge for cleanup. Apply the $92,000 to the application. Give the $8,000 its own record, so the project team can work the dispute without losing sight of the cash that already arrived.
First find what explains the difference. It is not always a dispute.
| Possible reason | Records to compare |
|---|---|
| Owner claims a backcharge | Written notice, contract provision, work performed, cost evidence |
| Retainage withheld | Approved application, contract rate, release history |
| Application revised | Original and accepted versions, credits or corrections |
| Partial payment of the application | Remittance, accepted lines, amount still due |
If the difference is retainage, check how the accepted application was built. If the amount you recorded as due was the gross figure before retainage, the withheld amount belongs on retainage receivable, not on a collector’s list. If the G702 already subtracted retainage to reach the amount due, the owner has withheld it twice, and that is a real question for the PM.
Worked example: resolving a backcharge (illustrative)
| Step | Cash | Credit | Open on the application |
|---|---|---|---|
| Application approved | $100,000 | ||
| Owner pays, deducts $8,000 backcharge | $92,000 | $8,000 (disputed) | |
| PM agrees $3,000 of cleanup was yours; credit approved | $3,000 | $5,000 | |
| Owner pays the remaining $5,000 | $5,000 | $0 | |
| Totals | $97,000 | $3,000 |
Check: $97,000 cash plus $3,000 credit equals the $100,000 application. Give the project manager the owner’s explanation, the affected work, and the response date. Record any approved credit and keep the remainder visible. When the owner pays the rest, tie that receipt to the same case so the history stays in one place. For deductions more generally, see customer deductions and short pays.
What goes wrong
- Starting from your submitted version instead of the accepted one. Every line downstream of the change is wrong.
- Stored materials billed twice. Once as stored, again as installed.
- Approved change orders never billed. Signed in the field, missed in the office.
- T&M tickets aging in a foreman’s truck. The work is done and nobody has billed it.
- Short pays applied as full payment. The disputed amount disappears from AR and from anyone’s follow-up.
- Retainage miscounted as a short pay. A collector chases money the contract says the owner is entitled to hold.
Before each application goes out
- Tie “previous billing” on every line to the accepted prior application, not your submitted draft.
- List signed change orders that are not on the draft, with a reason and an owner for each.
- Record the invoice reference on every T&M ticket you bill, so a resubmission cannot bill it again.
After the application, retainage tracking is covered in construction retainage, and following the cash is covered in construction collections. For how your subcontractors’ applications should be reviewed against these same lines, see subcontractor pay applications.