Construction pay applications

Pay applications handle progress billing on construction and public works contracts.

Set up a contract for pay applications

A buyer sets a services PO up for pay applications: the retention percentage (up to your policy’s cap, 5% under California PCC §7201) and whether prevailing wage applies. The PO lines become the schedule of values.

Each billing period

1. The contractor bills the period from the supplier portal: work completed and materials stored on each line, with certified payrolls for each week and a conditional lien waiver.
2. The engineer reviews and certifies the application. Certifying is blocked while:
   • a line is billed over its scheduled value,
   • a certified payroll week is missing (when prevailing wage applies),
   • the conditional waiver for this payment is missing, or
   • the unconditional waiver for the previous payment is not in.
3. Certifying raises an AP invoice for the amount net of retention. It exports to your ERP with a retention line on your retention account.

Each application shows its 7-day return date and 30-day pay date (PCC §20104.50).

Retention

Each contract shows the retention held, when it must be released after completion (60 days, PCC §7107) and the interest accruing once it is late. A final unconditional waiver is required before full retention is released.