Werx Academy
Progress Billing vs. AIA Billing: Key Differences
AIA billing uses set G702 and G703 forms. Progress billing is more flexible for private or smaller jobs.
Progress billing and AIA billing both let you invoice work as it gets done. The difference is the format. AIA billing follows standard G702 and G703 forms, required on many commercial and public jobs. Progress billing is flexible and fits private or smaller projects.
What is progress billing?
Progress billing means you invoice for work as it gets done. You do not wait until the project ends. It keeps cash flowing for you, and owners pay only for verified progress. Read the full guide to progress billing.
- Flexible format that varies by contract
- Invoices reflect percent of work completed
- Common on private, residential, and small commercial jobs
- Helps keep steady cash flow through the project
| Line item | App 1 | App 2 | App 3 |
|---|---|---|---|
| Rough-in | 40% | 75% | 100% |
| Panels & gear | 0% | 30% | 60% |
| Fixtures | 0% | 0% | 25% |
What is AIA billing?
AIA billing, also called AIA pay applications, follows standard forms from the American Institute of Architects. You use the G702 (Application for Payment) and G703 (Continuation Sheet) to request payment. See how the forms work in our guide to AIA billing.
- Standardized billing with G702 and G703 forms
- Shows retainage, percent complete, and balance due
- Often required on government and large commercial jobs
- Supports lender and audit requirements
| 1 | Original contract sum | $266,350.00 |
| 2 | Net change by change orders | $4,046.00 |
| 3 | Contract sum to date | $270,396.00 |
| 4 | Total completed & stored to date | $62,789.85 |
| 5 | Retainage (10%) | $6,278.99 |
| 6 | Total earned less retainage | $56,510.86 |
| 7 | Less previous certificates for payment | $31,240.50 |
What are the key differences?
The biggest difference is structure. Progress billing can be customized. AIA billing follows a strict template. Know which your contract requires before you start invoicing.
The table below sums up the differences, including the detailed schedule of values that AIA billing needs:
| Aspect | Progress billing | AIA billing |
|---|---|---|
| Document format | Flexible, varies by contract | Standard G702 and G703 forms |
| When required | Contractor's choice on private jobs | Often required on government, large commercial, and lender-financed jobs |
| Documentation | Invoices reflect percent of work completed | Detailed schedule of values plus proof |
| Retainage | Commonly 5 to 10 percent held | Commonly 5 to 10 percent held |
| Payment terms | Commonly net 30 | Commonly net 30 |
| Best fit | Private, residential, and small commercial jobs | Government, large commercial, or lender-financed work |
When should you use each method?
Pick the method based on project type and who needs to approve payment. Small contractors often prefer progress billing for its flexibility. Switch to AIA billing when a lender, owner, or public contract requires it.
- Residential remodels: progress billing
- Government or publicly funded projects: AIA billing
- Projects with heavy lender involvement: AIA billing
- Small private projects: progress billing
Both methods often hold retainage of 5 to 10 percent. Payment terms are commonly net 30 on either one.
How does software handle both?
Contractor software like Werx handles both progress and AIA-style billing in one system. You can send flexible progress invoices or standard AIA-style pay apps. Werx syncs to QuickBooks so your books stay accurate.
- Create flexible progress invoices or standard AIA-style pay apps
- Track retainage automatically across projects
- Generate professional forms in minutes
- Sync with QuickBooks Online for clean records
Learn more: progress billing and AIA billing.
Key takeaways
- Progress billing is flexible invoicing for work completed
- AIA billing is standardized G702/G703 pay applications
- Progress billing is common on private jobs
- AIA billing is often required on large commercial or government projects
- Werx supports both, with QuickBooks sync and automated forms
Frequently Asked Questions
Is AIA billing the same as progress billing?
No. Progress billing is a broad term for billing work as it gets completed. AIA billing refers to a standardized format using G702 and G703 forms.
Do small contractors need to use AIA billing?
Not always. AIA billing is usually required on large commercial or public projects. Smaller private jobs often use standard progress billing instead.
Can I use software for both billing types?
Yes. Software like Werx supports both flexible progress billing and standardized AIA billing. You can use the right method for each project.
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