AIA Billing Software: Is It Necessary?

Tired of worrying about your cash flow? Feeling overloaded with invoices and paperwork?

Let us introduce you to AIA billing.

Aside from it being fairly common in the construction industry, there are some great benefits to AIA billing, too.

But are you ready to take on even more meticulous paperwork?

AIA billing software could be the answer to your problems.

By the end of this guide, you’ll be familiar with:

• What AIA billing is
• Common AIA billing forms and what they’re used for
• The benefits and challenges of manual AIA billing
• What benefits AIA billing software can offer

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We’ll work to automate paperwork and compliance by generating payment apps with:

• Schedule of values
• Lien waivers
• Notarizations
• Prevailing wage
• Insurance documents
• AIA forms

If AIA billing is required for your job, Flexbase can automatically generate the AIA billing forms needed.

And we can edit/remove information as changes come.

But what’s the big deal with auto-generating AIA billing forms, anyway?

Aside from all the time it will save you and your company, it’ll also bring you peace of mind.

But to fully understand why, you need to have a good grasp on what AIA billing is and why it can be a headache to take on manually.

What is AIA Billing?

AIA billing software is a progress billing system created by the American Institute of Architects.

In short, the term “progress billing” means that you bill based on your progress on the job.

The amount you bill is generally related to the percentage of work you have completed. For example, if you’re halfway done with the job, you would bill 50% of the contracted amount.

AIA contract billing is a fairly common method for billing construction projects.

It’s a popular method for billing since it’s easier to collect money from customers due to information tracking and sign-offs.

You’re also able to compare prior period invoices with current period invoices.

AIA Billing Form G702

The AIA Billing Form G702 serves as both the contractor’s application and the architect’s certification.

It can be used to expedite payment and reduce the possibility of error.

According to the American Institute of Architects, if the application is properly completed and acceptable to the architect, the architect’s signature certifies to the owner that a payment in the amount indicated is due to the contractor.

The form also allows the architect to certify an amount different than the amount applied for, with an explanation provided by the architect.

This document is often referred to an:

• AIA billing form
• Progress billing form
• Payment app; or
• Pay app.

AIA Billing Form G703

Both Form G702 and G703 provide convenient and complete forms where:

1. The contractor can apply for payment; and
2. The architect can certify that payment is due.

In both of these forms, the contractor is required to show:

• The status of the contract sum to date (Including the total dollar amount of the work completed and stored to date)
• The amount of retainage (if any)
• The total of previous payments
• A summary of change orders; and
• The amount of current payment requested.

According to the American Institute of Architects, the G703 form breaks the contract sum into portions of the work in accordance with a schedule of values prepared by the contractor as required by the general conditions.

You can use a G703 form:

• On any size project
• When a contractor applies for progress payment to an owner
• When an architect certifies

Benefits of AIA Billing

The main benefit to progress billing is the speed.

You don’t have to wait until the end of the job in order to bill.

With AIA billing, you’re able to have a steady flow of cash on a regular basis.

This consistent cash flow allows you to…

• Control budgets
• Pay laborers and subcontractors
• Purchase materials; and
• Manage other debts

…with much more ease.

Another benefit? By paying in smaller installments, you can increase the chance you’ll be able to collect because it’s easier on the customer.

Utilizing AIA billing software forces regular communication on the progress of a job, and gives you a good insight into what might be going wrong.

Challenges of AIA Billing

To put it simply, it can be a bit complex.

Why? Because of all the information you need to track.

Progress billing in general is not as simple as printing a deposit invoice and billing the remainder at the end of the job.

There is a good amount of math and accounting required for any type of progress billing.

AIA billing, in particular, can be even more complex.

Part of AIA billing requires approval from:

• The architect
• General contractor; or
• Owner for each invoice.

Occasionally, one part will want you to adjust amounts billed or the percentage completed before they feel comfortable signing off.

Because of this, certain forms with a schedule of values will not always match the finalized versions.

This difference often requires updating previous application sections both when you are starting on a new invoice and while the earlier invoice is being approved.

If you want to reap the benefits of AIA billing but feel intimidated by the process, let Flexbase help.

We can generate payment apps using AIA forms in under two minutes. We’ll also automatically submit paperwork mapping to your customer’s AP process.

Is Specialized AIA Billing Software Required to Use AIA Billing Forms?

Technically, no.

You can purchase the correct forms from the AIA and fill them out manually — but it can be tedious and confusing.

Having AIA billing software integrated with your accounting software makes life that much easier.

Depending on what type of invoicing you’re doing, the answer to your “AIA billing software QuickBooks” Google search could be yes or no.

As we stated earlier, it would make your life that much easier to have your accounting software integrated with your AIA billing software. Contractors who use one of a few common apps with AIA billing features are able to integrate with QuickBooks Online, including:

• Knowify for Contractors
• Corecon
• RedTeam

But, if you’re looking to do the Application for Payment (AIA format) invoicing method, know that it is typically done manually outside of QuickBooks.

QuickBooks Job Profitability reports can be used to generate the data needed to fill out the Application for Payment form but markups must be applied manually in Excel.

How Much Does AIA Billing Software Cost?

On your own, the cost for AIA billing can add up quickly.

Since both the G702 and G703 forms are the AIA’s property, they are able to charge for every download.

To put it into perspective, in order to obtain an annual license for access to all AIA documents, you could be looking at spending over $8,000 for just 10 users.

With AIA payment application software, you could be facing yearly costs or costs per month per user.

Your cost with Flexbase, however, could total $0 — no subscriptions or licenses to worry about. So, we technically qualify as free AIA billing software.

You’ll pay minimum fees, too, starting at just 0.5% per payout received.

You only pay when you receive money.