Verify a pay application you received: a line-by-line reference
Every number on a pay application you received is either copied from a document you already hold or computed from another number on the same page. Nothing on an AIA-style G702 or G703 is free. Line 3 is Line 1 plus Line 2. Line 4 is the grand total of Column G. Line 6 is Line 4 minus Line 5. Line 8, the amount of the check, is Line 6 minus Line 7. On the continuation sheet every row satisfies G = D + E + F, the percent column is G ÷ C, Column H is the balance to finish (C − G), and Column I carries retainage where the contract varies it line by line. That redundancy is the whole point of the two-form structure: the document is built to expose its own errors. Verifying one means walking it box by box and finding the boxes that do not hold.
For the same review organized by what finds problems fastest rather than by where it sits on the page, read the workflow version of this review.
First: can the packet be verified at all?
Before checking a number, confirm you can check it. You need both forms, because Line 4 is only verifiable against the sum of Column G. You need the final G703 page, since grand totals print on the last page only, so three pages of a four-page schedule tie to nothing however clean the rows look. You need an application number and a period ending date that match across both forms. And past the first application you need last month’s approved copy, because four of the checks below compare this document to that one. For what each form carries on its own, see G702 vs G703.
Send an incomplete packet back the same day. It costs the subcontractor a day now against a full payment cycle later.
What each G702 line must equal
The certificate is nine lines. Two are copied from your own records, one from the continuation sheet, one from last month, one is the contract retainage rate applied to two bases the continuation sheet supplies, and the remaining four are arithmetic on the lines above them.
Line 1, Original Contract Sum. The executed contract value, and nothing else. It does not move for the life of the job, so compare it to your signed contract rather than to last month’s application: an error introduced in month two otherwise propagates forever. An approved change order never lands here. Send back: “Line 1 reads $500,000. Our executed contract is $480,000, and the $20,000 change order belongs on Line 2.”
Line 2, Net change by Change Orders. Signed and approved change orders only, netted: additions minus deductions. It must equal the net of the Change Order Summary block on the same form and match your change order log. Pending, verbal and unsigned changes do not belong here, which makes this the most common place for money to appear that nobody agreed to. Send back: “Line 2 shows $35,000. Our log carries approved change orders of $20,000. Which CO number covers the other $15,000?”
Line 3, Contract Sum to Date. Line 1 + Line 2, with no judgment in it. If it fails, one of the two inputs was transcribed wrong, and the size of the gap points at which. It is also one end of a cross-form tie: the sum of Column C has to equal it.
Line 4, Total Completed and Stored to Date. The grand total of Column G, restated on the certificate, and the most useful number on the document: every figure after it except Line 7 is computed from it, so a wrong Line 4 moves the retainage, the amount earned and the check. Verify it against the sum of Column G before you read anything below it. Send back: “Line 4 reads $302,700. Column G on the continuation sheet totals $300,000.”
Line 5, Retainage (5a and 5b). 5a is the retainage rate multiplied by completed work, 5b the rate multiplied by stored materials, and Line 5 = 5a + 5b. Two failures live here and look identical on the page. One is the wrong rate, including a rate that drifts mid-job with no contractual reduction behind it. The other, more expensive, is the right rate on the wrong base: applied to this period’s work alone (Column E) instead of cumulative completed work (Column D + Column E). That understates Line 5, overstates Line 6 and inflates the payment due by the full difference. Next most common is skipping 5b while Column F carries a balance. Send back: “5a is $9,500, which is 10% of this period’s work of $95,000. At 10% of cumulative completed work of $275,000 it is $27,500.”
Line 6, Total Earned Less Retainage. Line 4 − Line 5. It is also the figure next month’s Line 7 has to repeat, so an error here survives into the following application.
Line 7, Less Previous Certificates for Payment. Last month’s Line 6, copied forward. Not last month’s Line 8, and not the total of the checks you wrote. It is fixed before this month’s figures exist, which is what makes it the one line below Line 4 that a wrong Line 4 cannot move. When it does not equal the prior Line 6, one of the two applications is wrong and the payment due is unverified until you know which. Send back: “Line 7 reads $168,000. Line 6 on application 2 was $162,000.”
Line 8, Current Payment Due. Line 6 − Line 7, and the amount of the check. Verify it last rather than first: it is derived from everything above it, and a correct Line 8 sitting on top of a broken Line 4 is a coincidence, not a validation.
Line 9, Balance to Finish, Including Retainage. Line 3 − Line 6. It is the line most often left stale, and a stale Line 9 is a tell that the form was overtyped by hand rather than recalculated.
What each G703 column must contain
The continuation sheet is where the work gets described. Read the column headers before the letters, for a reason that closes this section.
Column A, Item No, and Column B, Description of Work. Both have to stay stable from application to application. Renumbering or reordering is not a math error, but it makes the carry-forward check impossible to run, which is sometimes why it happens, and a changed description against an unchanged item number moves scope quietly.
Column C, Scheduled Value. That line’s share of the contract, and the sum of Column C equals G702 Line 3. A Column C that moved since last month with no approved change order behind it is a reallocation of contract value, and it needs the same approval as any other change. Send back: “Item 2’s scheduled value moved from $150,000 to $165,000 since application 2. Which approved change order covers it?”
Column D, Work Completed From Previous Application. Last month’s cumulative, which is last month’s D + E for that line. This is the front-loading check, and the one most reviewers skip because it needs the prior document. A D that does not match its own history is claiming work twice or shifting money between lines. Send back: “Item 4 shows $40,000 in Column D. Last month item 4 carried $25,000 in D and $10,000 in E, which is $35,000.”
Column E, Work Completed This Period. This period’s work only. A negative belongs here against a credit change order and nothing else; an unexplained negative is a correction of a past overbill nobody disclosed.
Column F, Materials Presently Stored. Material bought and on site but not yet installed, and not already counted in D or E. Confirm the backup exists and that the balance moves into E rather than sitting for months. Stored material that never converts to work is either not there or not being installed. Send back: “Column F carries $25,000 against item 3. Please send the invoice, the delivery ticket, and proof of storage and insurance.”
Column G, Total Completed and Stored to Date. G = D + E + F, on every single row. This is the identity the whole document rests on, and its grand total is G702 Line 4. Send back: “Item 3 shows $60,000 in D, $40,000 in E and $25,000 in F, which totals $125,000. Column G reads $12,500.”
The percent column, G ÷ C. On the AIA form this column carries no letter at all. Anything above 100% is billing beyond that line’s scheduled value, which is over-billing whether or not the project total still looks reasonable. The column is never footed either: the total percent is the total of Column G divided by the total of Column C, never the row percentages added down. Send back: “Item 1 bills $52,000 against a scheduled value of $50,000. Either bring the line back inside its value or send the change order that raised it.”
Column H, Balance to Finish. H = C − G. Like Line 9, it is left stale more often than it is wrong. And Line 9 is not this column’s total: Line 9 includes retainage and Column H does not, so when the two cross-form ties below hold, Line 9 = the Column H total + Line 5.
Column I, Retainage. Filled in only where the contract lets retainage vary per line item. When it carries figures its total must equal G702 Line 5. When retainage is a flat rate the column is blank and the math lives on the certificate.
Why the letters are worth checking. Many vendor G702-style forms do letter the percent column H, which pushes every letter after it out of step with the AIA form. So “Column H” means percent complete on one form and balance to finish on the next. Quote the header text rather than a bare letter in anything you send back, and the ambiguity goes away.
The certificate, worked from the sheet totals
A five-line schedule on a $480,000 contract carrying $20,000 of approved change orders, at the third application, with retainage at 10% on both bases. Five of the sheet totals feed the certificate: Column C into Line 3, Column G into Line 4, Columns D and E into the base for 5a, and Column F into the base for 5b. Every G702 line below Line 4 then falls out of arithmetic, except Line 5, which needs the contract retainage rate, and Line 7, which comes from last month. For a row-by-row sheet that totals like this one, see the worked G703 example.
| Continuation sheet total | Amount | Where it lands |
|---|---|---|
| Σ Column C, scheduled value | 500,000 | Line 3 |
| Σ Column D, previous work | 180,000 | part of the 5a base |
| Σ Column E, this period | 95,000 | part of the 5a base |
| Σ Column F, stored material | 25,000 | the 5b base |
| Σ Column G, completed and stored | 300,000 | Line 4 |
| Σ Column H, balance to finish | 200,000 | Line 9 − Line 5 |
The sheet totals check against each other first: 180,000 + 95,000 + 25,000 = 300,000, which is the Column G total, and 500,000 − 300,000 = 200,000, which is the Column H total. Then the certificate.
| G702 line | Where the figure comes from | Amount |
|---|---|---|
| 1 Original contract sum | the executed contract | 480,000 |
| 2 Net change by change orders | approved change orders, netted | 20,000 |
| 3 Contract sum to date | Line 1 + Line 2, and Σ Column C | 500,000 |
| 4 Total completed and stored | Σ Column G | 300,000 |
| 5a Retainage, completed work | 10% × (180,000 + 95,000) | 27,500 |
| 5b Retainage, stored material | 10% × 25,000 | 2,500 |
| 5 Total retainage | 5a + 5b | 30,000 |
| 6 Total earned less retainage | Line 4 − Line 5 | 270,000 |
| 7 Less previous certificates | the prior application’s Line 6 | 162,000 |
| 8 Current payment due | Line 6 − Line 7 | 108,000 |
| 9 Balance to finish, incl. retainage | Line 3 − Line 6 | 230,000 |
Line 5 is the one to read twice, because it sits on two bases. Cumulative completed work is 180,000 + 95,000 = 275,000, so 5a is 27,500, and 5b is 10% of the 25,000 in Column F, or 2,500. Charge 5a against this period’s work alone and it comes to 9,500 instead of 27,500, putting Line 5 at 12,000 rather than 30,000: understated by 18,000, and the check on Line 8 inflated by the same 18,000 while every other line still ties. Line 9 confirms the pair of totals from the top: 200,000 + 30,000 = 230,000.
The three ties between the two forms
Three sums connect the continuation sheet to the certificate. They catch a document where each form is internally consistent and the pair still disagrees.
- Σ Column C = Line 3. The schedule accounts for the whole contract, change orders included.
- Σ Column G = Line 4. The handshake. Both numbers are the same quantity written twice.
- Σ Column I = Line 5, when a per-line retainage column is filled in.
A break in the second is the highest-value finding on the document, and the size of the gap localizes it. A few dollars is rounding. One line’s whole value is a dropped or duplicated row. A gap that divides evenly by 9 is transposed digits, since swapping two digits always moves a figure by a multiple of 9. A gap that is a clean power of ten is a misplaced decimal or a dropped zero. For the causes and the check that isolates each, see what to do when the G703 does not match the G702.
What only a second application can tell you
Four failures are invisible on a single document and obvious across two:
- Line 7 must equal the prior Line 6. Payment history that does not chain.
- Column D must equal the prior D + E, per line. Front-loading and money moved between lines.
- Column C must not move without an approved change order. Quiet reallocation.
- The retainage rate must not drift. A rate that changes mid-job with no contractual reduction behind it is an error or an early release nobody authorized.
The worked figures show Line 7 chaining, and the Column D total chaining with it: last month carried no stored material, so its Line 4 was 180,000, which is this month’s Column D total, and 10% retainage against that left the prior Line 6 of 162,000 that this Line 7 repeats. The per-line version of the Column D check needs last month’s sheet row by row, because money moves between lines with the total unchanged. The first application from a new subcontractor is the cheapest one to verify carefully, because every later one is checked against it.
The checklist, condensed
- Reviewable: both forms, final G703 page, matching application number and period, prior application on hand.
- Certificate: Line 1 against the contract. Line 2 against the change order log and the summary block. Line 3 = 1 + 2. Line 4 = Σ Column G. 5a and 5b at the contract rate on the correct bases. Line 5 = 5a + 5b. Line 6 = 4 − 5. Line 7 = prior Line 6. Line 8 = 6 − 7. Line 9 = 3 − 6.
- Every row: G = D + E + F. Percent = G ÷ C, never above 100%. H = C − G. D = prior D + E. E non-negative unless a credit. F backed by documents.
- Totals: Σ C = Line 3. Σ G = Line 4. Σ Column I = Line 5. The percent total is Σ G ÷ Σ C, never the row percentages added down.
Where a checker stops and you start
Most of that list is arithmetic, which means it can be verified rather than eyeballed. PayAppCheck runs each identity as a named rule and reports the expected figure, the stated figure and the difference, anchored to the box it sits in: the per-row checks in G703.RowTotal, G703.PercentComplete, G703.BalanceToFinish, G703.Overbilling and G703.NegativeThisPeriod, the printed grand totals in G703.ColumnTotals, the three cross-form ties in CrossForm.SumCToLine3, CrossForm.SumGToLine4 and CrossForm.RetainageToLine5, the certificate chain in G702.Line3, G702.Line5, G702.Line6, G702.Line8 and G702.Line9, the rate itself in G702.RetainageRate against both bases, and, with last month’s application on file, PoP.Line7ToPriorLine6 and PoP.ColumnDCarryForward row by row.
Lines 1 and 2 are a different kind of question, because no document in the packet can settle them. They are checked against your executed contract and your approved change order log, which is why Baseline.ContractSum and Baseline.ChangeOrders run only once you have pinned those records to the job. And what no checker reading one packet can reach at all is whether the work was performed, whether the stored material exists, and whether the contract authorizes the rate the form declares. The engine checks arithmetic and consistency from one period to the next. It cannot read your contract or visit the site, and it certifies nothing: it hands you the figures that do not tie and the box each sits in. For that boundary, see what a G702 checker cannot check. To run the cross-form ties on figures you already have, with no account and nothing to upload, use the free G703 tie-out checker; for the 5a and 5b bases, the retainage calculator.
Questions people ask
Four are pure arithmetic on the lines above them: Line 3 = Line 1 + Line 2, Line 6 = Line 4 − Line 5, Line 8 = Line 6 − Line 7, and Line 9 = Line 3 − Line 6. Line 5 is computed too, but it needs one figure the form never derives, the contract retainage rate, applied to completed work for 5a and to stored material for 5b. The remaining four are copied in: Line 1 from the executed contract, Line 2 from your approved change order log, Line 4 from the grand total of G703 Column G, and Line 7 from last month’s Line 6.
Line 7, less previous certificates for payment, is the prior application’s Line 6 copied forward. Not the prior Line 8, and not the total of the checks you have written. It is fixed before this month’s figures exist, which makes it the one line below Line 4 that a wrong Line 4 cannot move. When Line 7 does not match the prior Line 6, the payment due on Line 8 is unverified until you know which of the two applications is wrong.
Not on AIA’s own form, where the percent column carries no letter at all: Column H is the balance to finish, C − G, and Column I is retainage, used where the contract lets retainage vary by line item. Many vendor G702-style forms do letter the percent column H, which shifts every letter after it, so quote the column header text rather than a bare letter in anything you send back.
For four checks, yes: Line 7 against the prior Line 6, Column D against the prior D + E per line, Column C against the prior scheduled values, and the retainage rate against the rate applied before. Without the prior application you can confirm the document is internally consistent, which is not the same as correct.
Not on its own. Column H is C − G per line, so its total is the contract sum to date minus total completed and stored, with no retainage in it, while Line 9 is the balance to finish including retainage, Line 3 − Line 6. When the two cross-form ties hold, Line 9 equals the Column H total plus Line 5. When it does not, either a tie is broken or Column H was left stale.
Upload the pay application and the arithmetic on this page is recomputed from the extracted figures: each row, each column total, the three cross-form ties and both retainage bases, plus the carry-forward once last month's application is in the account too.
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