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Payment applications: Which contractors need to know to be paid

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In most industries, you will send the companies to simply unilateral invoices to request the payment. Only the most basic construction projects can get in with a simple invoice. Since construction jobs have a lot of moving parts, with a lot of money in the line, most general contractors require subcontractors to apply for payment with a payment application, also called only a "pay app". This is how Pay apps work in construction and what information they need.

Table of contents

How to use payment requests in the construction

At the core, a pay application is a detailed design calculation with a number of supporting attachments. The document or the group of documents provides information about the progress of a contract and requests the payment for the completed work.

In general, the pay application offers accounting work and materials provided by a certain period. It follows the work required by the Treaty, including change orders to determine the amount due. The support of information is usually required to provide. While there is no unique universal pay app , there is a handful of standard forms, and the required supporting information is generally quite similar.

Look at the video: payment applications in construction

Standard payroll form

AIA document G702 and consensesDocS 710 are quite standard pay applications - and require comparable information. Even if the PAY app required for your specific project is not one of these joint documents, the information on the app itself and the supporting documents will be likely to be similar.

The first page of a pay application contains the overview of the project status and offers the critical financial information. This is typically called "paying form".

Accordingly, the following list is more general information that you probably need by hand to properly fill in the payment of payment and easily and optimize the process.

  • the name of the project
  • the name of the real estate holder / contractor / architect
  • the number of this particular pay app
  • The periods covered by the respective pay app
  • the original contract amount
  • each change order
  • Total value of the previously completed work
  • retainage (calculated as a certain percentage of the listed work)
  • total amount of previous payments
  • power amount due
  • total balance remaining

In addition to the above information - the first page of a standard pay app also includes a space for the certification of the direct contractor and the architect of jobs / materials represented in the pay app.

Supporting documents / attached schedules

Most Pay applications are not supplied as standalone documents - you require additional information and supporting documents . Some of the additional information that may be required may be: the timetable of values ??; List of subs (and work done); a project plan ; And Landes Waiven (both of them and down the chain).

The titles of these supporting documents give a pretty clear picture of the desired content. A schedule of values ?? is an overview of the project on which the pay apps are based. d. H. The value of the values ??determines the projected costs for individual aspects of the project in the required extent. Often, the expenses need to be divided into smaller objects that are no bigger than some figure, say 20,000 US dollars to clarify the expected expenditures. Instead of 100.000 US dollar for Site Prep - the value control period would break this higher article in the amount of $ 20,000 for the classification, etc. and assign time values ??to assess progress. The list of SUBs may be required for a few reasons: 1) to justify the effort in the pay app, (ie from SUBS of SUBS provided during the period, and even billing recordings necessary to justify the value of the work and the amount carried out); and 2) in conjunction with the reasons of the lien, which must also be made available as a rule.

Lien-Webers can be requested during processing of the pay app prior to payment at a different time or supplied with the pay app, depending on the project and contract. Pfandgrune are a crucial step in preserving payment Since they provide the protection for the owner (or GC or whoever) before paying the same work twice. In fact, you can provide a signed pawn stock with your pay app without waiting for a request from a stronger party to make you faster.

Pay apps - how many things in the construction industry - take a relatively simple concept and add grants of the complexity . By familiar with the usual forms and requirements (including supporting documentation), you can position yourself to make your business more efficient and become faster.

Tags: service, paper, writing, high, quality, pay

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