Jonny Finity • August 6, 2023
In most industries, requesting payment is as simple as sending a bill or invoice for work you’ve completed. Due to the size and complexity of most construction projects, contractors often need to supply additional proof of their work to prove to the owner or general contractor (GC) that they deserve to get paid. On many projects, construction businesses are required to submit a payment application.
A payment application, or pay app for short, often refers to the pay application form itself. But a pay app is actually a collection of supporting documents that first and second tier contractors submit to request payment. The construction contract will typically define the process for submitting a pay app, the documents to include, and the deadline for submission.
A pay application form works closely with the schedule of values. Together, they show the percentage of each item of work that a contractor has completed, and the amount they should be paid for it, minus any retainage that the owner or GC is withholding.
Contractors don’t get paid for the work they complete. Contractors get paid for the work they document.
Pay apps are typically used on projects with progress billing when payments are spread out over the course of the job at specific intervals. It’s also known as AIA billing since the American Institute of Architects (AIA) produces one of the most commonly used pay applications. With progress billing, contractors submit a new payment application before the deadline of each pay period for the work completed and materials purchased in that period. Each payment application builds on the one before it, so it’s important to be accurate, and double-check your figures before submitting.
A typical pay application form will ask you to input the following information:
Contractors should read the contract closely before submitting the application to ensure they’re meeting the requirements. If you miss a deadline or fail to include a required document, your application could be rejected. Making a mistake could mean your payment is delayed. In some cases, you may even have to wait until the next pay period to apply again.
Generally, you should be as thorough and detailed as possible when applying for payment. The more evidence you can provide to back up your request, the more likely the owner or GC will be to approve it quickly and send your payment.
