Construction billing has its own vocabulary. This glossary defines common terms you'll encounter in RIVET and the construction industry.
A - D
AIA (American Institute of Architects)
Professional organization that publishes standard contract documents used throughout the construction industry, including the G702 and G703 billing forms.
Application for Payment
A formal request for payment for work completed during a billing period. Also called a "pay app" or "payment application."
Approved Amount
The amount the GC or owner agrees to pay, which may differ from the requested amount if some work is not certified.
Balance to Finish
The remaining contract value not yet billed. Shown as Line 9 on the AIA G702, calculated as Contract Sum minus Total Completed and Stored.
Billing Period
The date range covered by a pay application, typically monthly. The period defines what work is being billed.
Certificate for Payment
The architect's certification that the pay application has been reviewed and payment is recommended.
Change Order (CO)
A written modification to the contract that changes the scope, price, or schedule. Must be approved to affect billing.
Conditional Lien Waiver
A lien waiver that only takes effect upon receipt of payment. Safe to sign before receiving money.
Continuation Sheet
The AIA G703 document that provides line-by-line detail for each Schedule of Values item. Accompanies the G702.
Contract Sum
The total agreed price for the work. "Original Contract Sum" is the initial amount; "Contract Sum to Date" includes approved change orders.
E - L
Final Completion
When all contract work is complete, including punchlist items. Triggers release of remaining retainage.
G702
AIA Document G702, "Application and Certificate for Payment." The summary page of a payment application with the 9-line calculation.
G703
AIA Document G703, "Continuation Sheet." The detailed breakdown showing progress on each Schedule of Values line item.
General Contractor (GC)
The primary contractor responsible for the overall project. Subcontractors bill the GC, who then bills the owner.
Mechanic's Lien (Construction Lien)
A legal claim against a property by someone who provided labor or materials but wasn't paid. Lien waivers release this right.
Lien Waiver
A document releasing the right to place a lien on a property. Required with pay applications and upon receiving payment.
Line Item
An individual item in the Schedule of Values representing a portion of the contract work with its own scheduled value.
M - P
Materials Presently Stored
Materials delivered to the job site but not yet installed. Can be billed (usually subject to retainage) when properly documented.
Net Change by Change Orders
The sum of all approved change orders, whether additions or deductions. Line 2 on the AIA G702.
Original Contract Sum
The initial contract amount before any change orders. Line 1 on the AIA G702. Never changes throughout the project.
Owner
The party that owns the property and ultimately pays for the work. May pay the GC directly or through a construction lender.
Pay App (Payment Application)
Short for payment application. The complete package requesting payment for work completed during a billing period.
Percentage Complete
The ratio of work completed to total scheduled value, expressed as a percentage. Shown in Column H of the G703.
Previous Applications
Work billed in all prior periods, before the current billing. Shown in Column D of the G703.
Progress Payment
Partial payment made during construction based on work completed. Most construction is paid through progress payments.
Punchlist
A list of minor items to be corrected or completed before final payment. Created at substantial completion.
R - S
Retainage (Retention)
A percentage of each payment withheld until project completion. Typically 5-10%, released at substantial and/or final completion.
Schedule of Values (SOV)
A breakdown of the contract into line items, each with a scheduled value. Forms the basis for progress billing.
Scheduled Value
The dollar amount assigned to a specific line item in the Schedule of Values. Column C on the G703.
Statutory Form
A lien waiver form prescribed by state law. Using non-statutory forms in these states may be invalid.
Subcontractor (Sub)
A contractor hired by the GC to perform specific work on a project. Bills the GC, not the owner directly.
Substantial Completion
When work is complete enough for the owner to use the building for its intended purpose. Often triggers partial retainage release.
T - W
This Period (Work Completed This Period)
The value of work completed during the current billing period. Shown in Column E of the G703.
Total Completed and Stored to Date
The cumulative value of all work completed and materials stored from project start through current period. Column G and Line 4.
Unconditional Lien Waiver
A lien waiver effective immediately upon signing, regardless of payment status. Only sign after payment is received and cleared.
Work Completed
The dollar value of work physically installed on the project. Distinct from materials stored (delivered but not installed).
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