Subcontractor Application for Payment

A subcontractor's application for payment, without the owner-side fields

This is the same arithmetic a general contractor uses to bill an owner, stripped to what a sub actually sends up the chain: your subcontract, your schedule of values, your retainage, and what the GC owes you this period. No architect's certificate, no owner block. Enter your line items and the document builds itself.

What a GC's accounting department is checking

A sub's application gets rejected for a short list of reasons, and none of them are about the work. Knowing them is most of the job:

• The previous-payments line does not match their records. Yours has to agree with what was certified on your last application. This tool carries that figure forward exactly when you start the next one, so it cannot drift.
• A line is billed past its scheduled value. The moment one line exceeds what it was scheduled at, the whole application gets read line by line. This tool flags it and names the numbers.
• The schedule of values does not total the subcontract sum. Usually an approved change order folded into an existing line instead of getting its own.
• Stored material billed as completed work. Material on site is not installed work. It has its own column, at its own retainage rate.
• Change orders billed before they were signed. Priced is not approved, and approved is what counts.

Retainage, and when you actually see it

Retainage is the percentage the GC holds back from every application — commonly ten percent, often reduced part-way through the job, and released at or after completion. It is not a discount and it is not theirs; it is your money held as security. Two things worth knowing:

• Stored material can be held at a different rate than completed work, so this tool keeps the two separate rather than blending them into one percentage.
• Retainage released mid-job is a change to the rate, not a line item. Lower the rate for that application onward and the numbers follow.

Pay-when-paid, and why your application date matters

Most subcontracts make the GC's receipt of payment from the owner a condition of paying you, and the GC's own application to the owner has a cut-off date each month. An application that lands after that date does not wait a few days — it waits a full billing cycle. Ask for the GC's cut-off, bill to it, and date the application accordingly. It is the cheapest month of cash flow you will ever recover.

What you send with it

An application rarely travels alone. Depending on the subcontract, the GC is likely to want a conditional lien waiver for the amount being requested, unconditional waivers for amounts already paid, waivers from your own lower-tier subs and suppliers, and current certificates of insurance. Missing any one of them holds the payment regardless of whether the application itself is correct. There is a free lien waiver generator here too.

About the AIA forms

Many subcontracts are billed on AIA Document G702®/G703®, which are copyrighted forms licensed by The American Institute of Architects. This tool does not reproduce them. It produces an original document with the same figures in the same order. If your subcontract names the AIA form specifically, license it from AIA — a substitute will not satisfy a contract that names the form.