AIA billing is a particular form of progress billing — meaning the contractor bills based on the completed progress of the job over time.
In other words, progress billing takes the original contract amount plus any approved change orders times the percent complete. So if the job is 25% done, you’d bill 25% of the revised contract amount.
So what’s so special about AIA billing? Well, it refers specifically to a special set of billing forms published by the American Institute of Architects — typically, Document G702 “Application and Certificate for Payment” and G703 “Continuation Sheet.”
This continuation sheet is where we see the schedule of values, which breaks the progress billing down line-by-line. And this is where the word “application” is key.
AIA billing is referred to as an “application,” because the contractor doesn’t just give an invoice for the progress from their perspective.
Instead, the owner or GC will review the progress detailed on the application and redline any progress they might dispute.
Then, they’ll send it back to the contractor so they can submit a revised application and get paid based on the progress that everyone agrees on.
And as the job continues, this process repeats for any new progress until every item is billed as 100% complete.
And that, in a nutshell, is AIA billing.
More on AIA Billing
To learn more about AIA billing for construction contractors, head to our three-part series, “AIA Billing Basics,” with interactive examples.