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AIA Billing – Usage

By |2021-09-07T09:41:57-05:00July 30th, 2021|0 Comments
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Introduction

There are many methods to complete AIA Billing in the contracting industry.  While each of those methods may vary from one Contractor to another, Total Office Manager has integrated this process to work based on data that is entered into the software.

Many Contractors are used to filling out the AIA Payment Application then entering in an Invoice based on the information contained on the Payment Application.  This practice was typically performed because there was not an easy or computerized method to tie everything together.  In the world of Accounting, before you send an Invoice to a Customer, you must first enter it into your accounting software so that it increases your receivables.  The AIA Payment Application is simply a Standardized Invoice which you are requesting payment for the job you are currently working on.  Using the Progressive Billing feature in Total Office Manager will make completing the AIA Payment Application easier.

In order to get the most out of the AIA functions in Total Office Manager, you will need to do the following:

  1. Create an Estimate
  2. Create an Invoice
  3. Create AIA Payment Applications

Step-By-Step

Create an Estimate

  1. Enter an Estimate for the job you are currently working on.  The information on the Estimate will be used for entries on the Continuation Sheet. If any information changes on the Estimate as you work on the project, you will need to be sure to adjust the Estimate accordingly.  When saving the modified Estimate, please be sure to Add Change Orders.  Changes to the Estimate will be recorded on the AIA Payment Application in the designated sections for Change Orders.
  2. If you have retention which needs to be included, please subtotal and add a Retention item to the Estimate. This amount will calculate through to the AIA Payment Application for Line 5 on the Summary of Work (G702) and Column I on the Continuation Sheet (G703).
  3. When you are ready to create your first (and subsequent) Payment Applications, create an Invoice from the Estimate for a percentage of the Estimate to be billed.  It is understood that the entire Estimate line items may not be invoiced at the same percentage rate.

Create an Invoice

  1. You can create the Progressive Invoice by opening the Invoice/Sale/Estimate/Credit List under the Customer menu, right-clicking on the Estimate you are ready to invoice, and choose the option to Create Invoice. Or you may Edit the Estimate you are ready to invoice and under Menu option on the Estimate choose Create | Invoice.
  2. Once the Invoice is created, you can then modify the percentage that is being billed on a Line Item by Line  Item basis under the Total % column located to the far right on the Invoice Items grid. Save the Invoice.

Create an AIA Payment Application

  1. From within the Invoice (Menu option), you will then create the Payment Application.  This will populate the Scheduled Values from the Estimate for the items invoiced and also put the invoiced amounts in the This Period column.  Go to Menu | Create | AIA Payment Application. The AIA PAyment Application form will open.

Form Header

The information in the header will be populated automatically.

Application Date: The date you want shown on the application (much like an invoice date). Today’s date will be entered. You may change the default value if it is necessary.

Application #: The number for the application (much like an invoice number). The next available number will be entered automatically. You may change the default value if it is necessary.

Customer:Job: The customer that this application was created for. This should almost never be changed.

Vendor: The vendor that this application was created for and sent to. This should almost never be changed

AIA Add Group Items: When a Group Item type was used on an invoice, you have the option of copying over the items within that group or just the header of that Group Item. The header will appear as a single item with a single price for all items within that group.

General Info tab

  1. The value of the fields come from other places in the software. You may edit any of the information on this tab if needed. This tab was designed to look like the paper version of an AIA Payment Application.

Summary of Work tab

The values that you see on this form come from the estimate and invoice. You must be very careful about changing any of this information. If the values are incorrect, you should go back and edit the estimate and invoice as needed.

  • Line 1: Contract Amount is the total that is found on the Estimate.
  • Line 2:  Sum of Change Orders is the total amount of Change Orders that were entered for the original Estimate.
  • Line 3: Line 1 + Line 2
  • Line 4: Total Completed and Stored is the total amount of the Invoice that was billed from the Estimate.
  • Line 5: Retainage. These values come from the Retainage line item from the invoice.
  • Line 6,: Total Earned Less Retainage: What you’ve earned, as far as approved Change Orders are concerned, is on Line 4. What the client is allowed to retain is on Line 5. Subtract the Total Retainage from your earned revenue and enter the difference on Line 6.
  • Line 7: Less Previous Certificates for Payment: This is line 6 from your last Payment Application (the last one you sent). Confusion is caused by GCs and Owners who take so long to pay that you are submitting your next Payment Application before the previous one gets paid. Many people write down payments received to date on Line 7 and ignore pay requests being processed. Don’t do that! This Payment Application doesn’t care whether you’ve been paid. It only cares whether you’ve earned additional payment(s). Go back to your immediately preceding Payment Application and write down the value from Line 6 Total Earned Less Retainage on that application. Remember, only the very last Payment Application is considered.
  • Line 8: Current Payment Due: Take your Line 7 value and subtract it from your Line 6 value. Write down the difference on Line 8. This represents the value you should be paid for work earned during this pay period and any change in retainage during the pay period.
  • Line 9: Balance to Finish Including Retainage: Take the contract sum to date from Line 3 and subtract the Total Earned Less Retainage from Line 6. This tells the GC that he is contracted to pay you an additional amount after paying this application.vThis is another confusing line because it acts as if all Change Orders have been formally processed and that all previous Payment Applications have been paid in full.
  • Summary of Change Orders table: Change Orders that add money to your contract separated from those that subtract money from your contract. The Net Changes by Change Order should be exactly equal to the value you entered on Line 2.

The rest of the fields contains terms, conditions, and other elements that are automatically populated but can be changed as needed. Any changes you make here will be saved to this application only.

Continuation Sheet

  • Column A: For reference. You can add a line number if you wish.
  • Column B: A description of the item. This comes from the invoice and can be edited.
  • Column C: The amounts that were entered on the original Estimate.
  • Column D: The Total of Work Completed from the Previous Applications amounts in Column D & E. This is the total dollar amount you requested for this line item through your last Payment Application. That includes materials that you previously listed as Stored Materials but have now put in place (IE: Installed). Column D does not include work completed for this period nor does it include newly stored material.
  • Column E: The amounts that were progressively billed for the work that is completed.
  • Column F: The value of Materials Presently Stored on the Job Site for which you are seeking payment. This is typically referred to as the total value of any materials that are currently stored but not installed. Usually, to get paid for stored materials they have to be on-site or in a bonded, secure storage facility.
  • Column G: The Total of the amounts shown in Columns D, E, & F.
  • Column H: This is the difference between Column C and Column G
  • Column I: Normally used only for contracts where Variable Retainage Rates are permitted on a line-item basis. It does not need to be completed for contracts that have a consistent rate of retainage held over the entire contract.

Related Topics

AIA Billing – How It Works

Percentage of Completion or Progress Invoices

Retainage (creating an item)

AIA Trademark Notice

The name The American Institute of Architects and the initials (AIA) are registered trademarks of the American Institute of Architects. Aptora Corporation makes no claim to its trademarks and is in no way affiliated with the American Institute of Architects.

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HVAC Electrical Plumbing Software

Aptora delivers a true All-In-One services software solution including CRM, accounting, payroll, inventory, vendors, sales, marketing, dispatch, flat rate pricing, and more. NO 3rd party plugins or integrations required. Created by contractors for contractors, we know what it takes to grow your services-based businesses.

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