Bonus Depreciation. While AIA billing might seem intimidating at first, it’s very manageable with the right tools and processes. Please let me know the best way to approach this and what information I will need to get started and certified. In addition, you’ll need to update the “previous applications” amount every time you bill and add the new application amount. The bad news: it requires AIA billing, and you haven’t a clue where to start. That allows you to more easily control budgets, pay laborers and subcontractors, purchase materials, and manage other debts. In fact, this often happens, so don’t overstate your progress. This gives the customer recourse in case they aren’t satisfied with the work. Learn how your comment data is processed. . In red lining, they’ll make adjustments to your amounts and return the forms to you. As a form of progress billing, AIA billing is especially helpful because it standardizes how you bill, what … Armed with this basic knowledge about the principles of AIA billing, it’s certainly possible to purchase forms from the AIA and start filling them out. It’s not. Ordering materials is a tricky part of budgeting. In part two of this series, we’ll show you exactly what an AIA form looks like and how to fill it out. For example, let’s say your scheduled value for an item was $10,000 and your first application billed for $2000 in stored materials. That doesn’t seem so hard, right? Progress billing in any form requires quite a bit more math and accounting. I currently work for a company that does residential and commercial billing but I would like to set my sights higher in the commercial side of things. However, AIA billing software that’s fully integrated with your accounting software can certainly make things easier. One of those standards is a set of forms contractors use for a specific style of progress billing, plus the practices around them. “Progress billing” simply means that you bill based on your progress on the job. Nancy Smyth, Sunburst Software Solutions, Inc.QuickBooks Construction & Payroll Expert. Therefore, the form isn’t technically an invoice. !function(o,t,e,a){o._aoForms=o._aoForms||[],o._aoForms.push(a);var n=function(){var o=t.createElement(e);o.src=("https:"==t.location.protocol? If you had “posted” the original application as accounts receivable in your accounting system, you’re going to need to deal with the change there. This eBook contains everything you’ll need to learn how to complete these billing forms correctly; including a sample AIA training exercise that walks you through, from start to finish, how to complete an AIA G-702 & G-703 form. In part three, we’ll walk you through how to do it in FOUNDATION® and show you the benefits of using construction accounting software that has built-in AIA billing tools. Download your item before leaving this page! Later, an application that shows 100% complete for that line item wouldn’t mean billing $10,000 that time. All Rights Reserved. The good news: you’ve landed a huge contract with a ton of potential for profit and growth. QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. It forces regular communication on the progress of a job, and requires you to have a good understanding of what might be going wrong. You’ll need to make adjustments to your billing system, produce another version of the application, and re-submit it. gets to take a look at those percentages of completion and make sure that they agree with your estimation. Completing the first AIA billing form on a job is really pretty simple with the right tools. The amount you bill is generally related to the percentage of completed work. This form allows the architect to certify an amount different than the amount applied for, with explanations provided by the architect as to why the amount is different. I've been using and supporting QuickBooks products since the early 1990's. But there are other benefits. The term “AIA” stands for the “American Institute of Architects.” The AIA is a professional organization of more than 90,000 architects, which creates standards for the industry. Keep current on payroll changes, new and easing restrictions, and other news affecting the construction industry. You’ve got this! I hope you find resources available here to be helpful. The AIA billing system is a standardized method of construction percentage of completion contract billing (IE: Progress Billing) developed by the American Institute of Architects (AIA) in 1992. At the end, when you’re 100% complete, you’d have $9,500 billed and $500 in retainage. Materials should be on site for when you need them, but you don’t want to order them too early and tie up cash unnecessarily. Essentially, you’re asking for permission to invoice them the amount that the G702 indicates. The downside is that it’s not as simple as printing a deposit invoice and billing the remainder at the end of the job. As you near the end of the job, you “release” the retainage — which usually makes up the final billing. Sunburst Software Solutions, Inc. has been an Intuit Developer Network member since 2001; first as a Premier Member and then one of the first 13 developers to achieve Gold Developer status in 2006. The schedule of values on an AIA form is the detail of work that you plan and complete. If you were to bill another 10% of that line item on each application, another $50 would be held in retainage each time. Thank you for your time and hvae a great day! Remember: The whole point of the AIA billing process is to make it crystal clear to the owner or GC what work you’ve completed to date, both in this period and in prior periods. It’s just an application detailing the amount you’d like to invoice. The AIA is the voice of the architectural profession and a resource for its members in service to society. Payroll, Bookkeeping & Accounting Task Checklist, VIDEO: How To Make Your QuickBooks Customer:Job List More Meaningful, Welcome to Learn to use QuickBooks in your construction business, eBook: Getting Equipment Costs into QuickBooks Job Costing Reports, Get 20% Off QuickBooks Pro Small Business Accounting Software + Free Shipping, Save 20% Off QuickBooks Premier Accounting Software + Free Shipping, Buy QuickBooks Enhanced Payroll and Save 20%, G-702 Contractors Application for Payment, forget about any basic accounting principals you’ve ever learned, ignore change orders that have been submitted or approved, but not processed, ignore money that is still outstanding from previously submitted applications for payment.