Issue link: http://www.e-digitaleditions.com/i/105134
Contract Billing continued (AIA) in 1992, the AIA billing system is a method commonly used to submit job-related paperwork and payment apps for work performed on construction projects. AIA forms cover everything from change orders to performance and payment bonds but the ones used most often for billing are the G702 and the G-703, which is BRESCO's preferred method for requesting payment on jobs. Referred to as Page 2 of the AIA, the G-703 or "Continuation Sheet" breaks down the contract sum into phases in accordance with the schedule of values, while the G702 or "Application and Certificate for Payment" summarizes the information submitted on the "Continuation Sheet." It requires the contractor to show the status of the contract sum to date, including the total dollar amount of the work completed and stored to date; the amount of the retainage (if any); the total previous payments; a summary of the change orders; and the amount of the payment currently being requested. Although all jobs do not require the AIA, e.g., schools and some government projects, most contractors accept them, says Dille."The key to prompt payment is knowing what part of the AIA each contract requires, as every contractor has different billing preferences and their own version of the AIA," she says. "Some contractors prefer not to use the first page of the AIA because they have their own cover sheet, continued on page 14 Paving the Way for Payment When it comes to improving the billing process and increasing your chance of getting paid, it's all about trial and error, according to BRESCO's billing clerks Jessie Cason and Gloria Dille. "The more experience you have, the better you are at rolling with the punches," says Dille. "I'm not saying that someone new can't roll just as well, but this AIA billing is best learned by jumping in and learning from the mistakes that are made." Below is a combined list of the steps the pair takes at the beginning of a job to avoid payment delays. 1. It's important to make contact with the contractor to introduce yourself and give them your contact information, says Dille. "This opens the lines of communication and provides them with a reference point if there are any problems with your future billings. Good communications with the contact at the contractor's usually avoids any kickbacks from them on insurance certificates as they will shoot you an email so you can respond right back with what they need." 2. If not readily known, reach out to the project manager. Establishing a good rapport with them at the beginning works in your favor. If the PM is not available, ask for the person that handles billing and channel questions/information through him/her. 3. Confirm the exact bill-to and send-to address by requesting the information via email at the beginning of a project. 4. Review contract documents and any accompanying letters for progress billing information. Make notes of 1 2 FEDA New s & View s what they require, date due, and any questions of verification that may be needed in the future. 5. Most contract jobs require an AIA prior to requests. "I attach this to my introduction," says Cason. "If it is a tax savings project, where the owner will issue a purchase order for the material portion of this contract, I'll send the backup for the equipment needed to issue the purchase order. Because the State of Alabama allows for tax reduction on some of our equipment, I send them a copy of the law and a breakdown given to us by each county and city." 6. Request permission to request payment for stored materials, preferably in our warehouse or in insured trailers parked on the owner's site. 7. Inform the contractor of the format of the insurance certificate that you can provide, says Cason. ("I usually do one total stored to date $_____.") 8. Offer a "transfer of title" to the owner, with BRESCO holding liability, until the equipment is turned over. 9. Inform the customer that pictures of the equipment can be supplied upon request. 10. Flag your shipments. A carrier has been known to lose a draw, which can also delay payment, says Cason. "Sometimes this is not discovered until the credit manager calls on payment and learns they did not receive it. I have all my shipments checked to inform me via email when delivered."