By Lynn Pearcey, MBA, Copywriter, AIA Contract Documents
January 31, 2024
A payment application is a collection of documents used to request payment for work that has been completed or secured materials. In essence, a payment application is an invoice, but with the complex nature of construction, details matter. With that being said, a payment application is used to request payment, but the documents are structured in a format that allows the submitting party to include pertinent information regarding agreed-upon deliverables.
G702S-2017: The Industry Standard
When it comes to payment applications, G702S–2017 is widely recognized as the document of choice. Flexibility, trust, and functionality are a few of the words most commonly associated with this solution, a favorite among subcontractors. “In general, all of our documents are considered the industry standard, and that designation also applies to G702S-2017”, said Ben Segal, Documents Manager for AIA Contract Documents. “Regardless of the type of project, if you’re a subcontractor, using G702S-2017 makes life a lot easier.”
Subcontractors aren’t the only ones who looked favorably upon the G702S-2017, as most financial institutions, including local and state banks, view it as the ideal payment application option. “Banks and financial institutions, in general, really like the document for several reasons. First, it’s well-written and easy to understand and use. This reduces the time it takes to process the request, which is always a plus for subcontractors regarding payment. Second, the document is trusted, and with so much at stake, including money and reputations, this point can’t be overemphasized. Lastly, just as is the case with all AIA Contract Documents, the G702S-2017 is balanced, meaning it’s fair for all parties who are a part of the project.
When it comes time to receive payment, subcontractors often lament the volume of signatures needed before a check gets cut. These delays might not seem like much, but in instances where profit margins are tenuous and time is of the essence, the fewer signatures required, the better, especially if you’re the subcontractor awaiting payment. “One of the major benefits subcontractors find with the G702S-2017 is that it’s configured to their needs. This configuration includes removing the architect certification portion of the document, meaning their signature is no longer required to certify the payment request. This streamlined approach works well for all parties but especially favors the subcontractor.”
Time savings are another benefit subcontractors routinely see when using G702S-2017. As previously mentioned, time is of the essence in construction, as extreme timelines govern most projects. Not having to invest time into the hassle of creating invoices, chasing unnecessary signatures, and submittals means the subcontractor is free to invest that time and energy into delivering a quality finished product to the stakeholder. “Infusing the G702S-2017 into the project eliminates the back and forth, guesswork, and stress while positioning subcontractors to work at a high level.”
Payment applications are essential pieces of any construction puzzle. They have an invoicing component; their ultimate goal is to secure payment. But they’re also living documents that outline progress and critical details that essentially tell the story of a project. For subcontractors, choosing a payment application that aligns with your needs is important. The G702S–2017 Application and Certificate for Payment, Contractor-Subcontractor Version is a robust, resilient, trusted solution with a history of serving the needs of subcontractors. If you’re a subcontractor looking to responsibly grow your business, build relationships, and drive fluid payment streams, we encourage you to integrate this valuable resource into your document mix.
About Ben Segal
Ben Segal is the Manager of Documents Information at AIA Contract Documents. For over two decades, Mr. Segal, a graduate of Washington and Lee University has worked closely with attorneys and members of the Education Team to ensure the production of quality documents that meet the emerging needs of the construction industry.
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AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.