How to review a subcontractor pay application: a checklist for GCs
The short answer: a subcontractor pay-application review is eight checks, run in the order that finds problems fastest. First, confirm the application is complete and signed. Second, confirm Line 1 is the executed contract sum and Line 3 equals Line 1 plus Line 2. Third, confirm every G703 line satisfies Column G equals D plus E plus F. Fourth, confirm the G703’s column totals carry to the G702: the sum of Column C must equal Line 3, and the sum of Column G must equal Line 4, the single most useful check, because a mismatch here means the payment amount cannot be trusted. Fifth, confirm retainage on Lines 5a and 5b matches the contract rate. Sixth, confirm this month’s Column D equals last month’s D plus E, which is how front-loading gets caught. Seventh, confirm stored materials in Column F have real backup. Eighth, confirm the lien waivers match the payment. Most of this is deterministic arithmetic, not judgment, which is why it can be verified rather than eyeballed.
1. Is the application complete and signed?
Both forms present (the G702 certificate and its G703 continuation sheet), the right project and period, the contractor’s signature, and notarization where the contract requires it. Incomplete packets waste a review cycle. Bounce them immediately.
2. Does the contract sum match your records?
Line 1 must be the executed contract value, Line 2 only approved change orders, and Line 3 their exact sum. Unapproved change-order money in Line 2 is one of the oldest tricks in the book, and Line 3 exposes it.
3. Does every G703 line compute?
On each row: G = D + E + F, I = C − G, and H = G ÷ C. Anything over 100% complete is over-billing on that line. Nobody does this step by hand on a 120-row schedule, which is precisely where errors hide. If the application arrived as a PDF, recomputing every row starts with getting it into a workable spreadsheet first.
4. Do the G703 totals carry to the G702?
Σ Column C = Line 3 and Σ Column G = Line 4, to the dollar. When these don’t tie, either a line item is wrong or the certificate is, and the size of the dollar gap points at which cell to open.
5. Is retainage per the contract?
Lines 5a/5b at the contract rate on the right bases, Line 5 their sum, Line 6 = Line 4 − Line 5. Variable or reducing retainage (e.g. dropping at 50% completion) needs the contract terms next to you. If the rate or the bases are in question, how retainage is calculated walks through 5a, 5b, and Line 5 with worked numbers.
6. Does it carry forward from last month?
Each line’s Column D must equal the prior application’s D + E for that item, and Line 7 must equal the prior application’s Line 6. Drift here is how double-billing and quiet front-loading get through. It stays invisible unless last month’s application is open next to this one.
7. Are stored materials real and documented?
Column F needs backup: invoices, bills of sale, insurance, and an agreed storage arrangement. Materials billed under F move out of F and into D/E when they’re installed. They must not be counted twice.
8. Do the lien waivers match?
The conditional waiver amount should match the payment you’re about to make, and prior-period unconditional waivers should match what you already paid. Waiver rules are state-specific. Check your statute.
Doing this in seconds instead of an afternoon
Checks 2 through 6 are pure arithmetic. The pay application carries enough redundancy to verify itself, and that is what PayAppCheck automates. Upload the PDF or Excel and every line is extracted, every identity recomputed to the cent. Each figure that doesn’t tie is flagged, including against the prior month’s application. You review the flags, not the whole document. If you’re weighing up tools for this rather than doing it by hand, the comparison of pay-application software for general contractors covers what each category actually does. See how PayAppCheck automates this checklist, from upload to flagged cells.
Questions people ask
A pay application review is the receiver’s verification of an inbound G702/G703 billing package before payment: eight checks covering completeness, contract sum, per-line math, cross-form totals, retainage, carry-forward from the prior month, stored materials, and lien waivers. Most of it is arithmetic the forms define: on every G703 line G = D + E + F, H = G / C, and I = C - G, and the column totals must equal Lines 3 and 4 on the G702. The rest is documentation: signatures, stored-material backup, and waivers that match the payment.
By hand, plan on 15 to 30 minutes for a short schedule and an hour or more for a multi-page continuation sheet, because every line’s G = D + E + F and I = C - G has to be recomputed and each column re-added. With the arithmetic automated, the math checks run in seconds and review time goes to the judgment items: stored-material backup, waiver amounts, and whether billed progress matches the site. The one step you cannot skip either way is pulling last month’s application to verify carry-forward, so keep prior applications filed where you can reach them.
That the sum of G703 Column G equals G702 Line 4, Total Completed and Stored to Date. It is the handshake between the detail and the certificate: one wrong digit anywhere in the schedule breaks it, and every figure after Line 4 (retainage, payment due, balance to finish) is computed from it, so an error there flows straight into the check amount. If you verify nothing else by hand, add up Column G.
Localize it before you bounce the packet: the dollar size of the gap points at the cell, and the form’s redundancy (G = D + E + F on each line, column sums carrying to Lines 3 and 4, Line 8 = Line 6 - Line 7) narrows a single bad digit to one location. Then send the sub one correction request naming the exact line, the stated figure, and the expected figure, instead of a vague rejection that costs a payment cycle. Never pay against a document that does not tie.
The arithmetic can be automated completely: checks 2 through 6 (contract sum, per-line math, cross-form totals, retainage, carry-forward) are identities the document itself defines, so software recomputes each one and flags every mismatch down to the cell. The judgment items stay human: whether stored materials have real backup, whether progress matches the site, and whether lien waivers satisfy your state’s rules, which you must verify against the statute itself since software is not legal advice. PayAppCheck automates the math and hands you the flags.
Upload an inbound pay application and checks 2 through 6 run to the cent, with every mismatch flagged to the exact cell.
Try PayAppCheck freeNo card required. The free tier is the trial.PayAppCheck is software, not a law or accounting firm. Not legal, accounting or tax advice. Verify lien, notarization, and retainage requirements against your contract, your state statute, and your accountant.