Billing pay applications line by line

Each month, bill every schedule of values line for the work completed through the cut-off date: percent complete for installed work, plus stored material where the contract allows. Add approved change order lines, calculate retainage and subtract what was already certified to get the amount due. Attach the backup the GC requires — conditional lien waivers, payroll reports, updated insurance — because a missing document holds the whole payment.

By Michael Reddy, IntelBid

After this lesson you can

Bill each schedule of values line by percent complete
Work a pay application from completed-to-date to amount due
Submit clean backup so the payment isn't held

The pay application cycle is explained in the glossary, and the retainage math in how retainage works. This lesson is how to build the bill itself.

How do you bill each line?

Measure progress through the cut-off
Walk the job or use your daily logs: installed SF by product, base LF, rooms complete.
Convert to percent complete
Installed quantity ÷ total quantity for that line. Bill labor lines on installed work.
Bill delivered material
Material lines can include delivered and stored material, if the contract allows and its conditions are met.
Add approved change orders
Only approved changes, as their own lines. Pending changes wait.
Do the math
Completed to date → retainage → earned less retainage → less previous certificates → amount due.

Pay application #2Worked example · illustrative numbers

Contract (schedule of values): $104,645
Billed on pay application #1: $21,700
Retainage: 10%, rounded to whole dollars

Completed to date by line: mobilization 100% ($2,500), carpet tile material 75% ($28,500), carpet tile labor 50% ($6,200), LVT material 40% ($8,920), LVT labor 20% ($2,369), base and transitions 10% ($960), floor prep 100% ($4,800), closeout 0%.
Total completed to date: $54,249.
Retainage: 10% × $54,249 = $5,424.90 → $5,425.
Earned less retainage: $54,249 − $5,425 = $48,824.
Previously certified: $21,700 − $2,170 retainage = $19,530.
Amount due this period: $48,824 − $19,530 = $29,294.

Bill $29,294 this period, with $5,425 held in retainage so far. Illustrative percentages.

Completed to date$54,249
Less retainage (10%)−$5,425
Earned less retainage$48,824
Less previously certified−$19,530
Amount due this period$29,294

Pay application #2 from the worked example, from completed to date down to the amount due.

What backup goes with the bill?

Document	When it's usually required
Conditional lien waiver for this payment	Most pay applications — see which waivers are safe to sign
Supplier lien waivers	When the GC tracks lower-tier suppliers
Certified payroll	Prevailing wage projects, often weekly
Stored material documentation	Invoices, insurance and storage details when billing stored material
Updated insurance certificates	When a policy renews during the job
The GC's own forms or portal entries	Whenever the GC uses them — follow its format exactly

One missing form holds the whole payment

GCs rarely call about a missing waiver or payroll report — the payment just doesn't come. Keep a checklist of each GC's required backup and send it with every application.

Overbilling and underbilling

Overbilling — billing ahead of actual progress — brings cash in early, but it's a debt against future work, it damages trust when found, and it can leave too little to bill when the hard, late work is left.
Underbilling — billing less than you've completed — finances the GC with your money and weakens your cash flow.
Bill what's actually done, every month, on the cut-off. Your financial statements should show the difference as work in progress, so talk to your accountant about how it's tracked.

How does a subcontractor fill out a pay application?

Bill each schedule of values line for work completed through the cut-off date, add stored material and approved change orders where allowed, calculate retainage, subtract previous certificates to find the amount due, and attach the required backup.

What is percent complete billing?

Billing each schedule of values line based on how much of that line's work is finished — for example, installed square feet divided by total square feet.

What is overbilling in construction?

Billing for more work than has actually been completed. It brings cash in early but creates an obligation against future billings and can harm trust with the GC.

Key points

Bill each line on real progress through the cut-off.
Completed to date → retainage → less previous → amount due.
Send every required backup document, every time.

In IntelBid · Won project → SOV tab

Pay applications from the SOV

On a won project's SOV tab, IntelBid bills each pay application as this period's progress against your schedule of values, withholds retainage at the percentage you set, and shows the net amount due — with an option to push the invoice to QuickBooks. Each pay application tracks whether it's a draft, sent or paid.

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About the author. Michael Reddy builds IntelBid, bid management software for commercial flooring subcontractors. These lessons come from the bid desk: how the work is priced, won and paid for.