What is AIA-style billing?
AIA-style billing is a system developed by the American Institute of Architects (AIA). AIA-style billing is a process for submitting payment applications for progress billing on construction projects. The system was created to make the process more organized and easier to manage.
This type of construction billing standardizes how you invoice for projects. It’s also the industry standard for larger projects and government funded projects. Using AIA-style billing software can help you process payments faster, reduce potential errors, and keep you compliant with industry standards.
Challenges with AIA-Style Billing
The process for submitting payment applications can be complicated. Most contractors face one or more of these common challenges.
AIA forms are complex because there is a lot of information to manage. Processing these complex forms can use up a lot of administrative time. Also checking that your data is correct requires an integrated system where the project management and accounting departments share data.
There are additional complexities with AIA-style billing when projects inevitably change. Managing change orders, tracking retainage, and billing for stored materials require attention to detail. Without a reliable system to track your AIA-style billing, you risk poor communication, misunderstandings, and payment delays.
Using AIA-Style Billing Software Helps Manage AIA-Style Billing More Effectively
Choosing construction software that supports AIA-style billing makes it easier for contractors to avoid some of the challenges commonly associated with standardized progress billing. With specialized tools and features that help you streamline and simplify the invoicing process here’s how software can help.
Simplify Form Management
Construction software often includes pre-built templates for AIA forms (G702, G703, etc.). These templates allow contractors to fill out and manage these documents easily. Look for software that auto fills certain fields. You also want validation features to help your admin staff check that your forms are accurate and complete.
Use Your Time More Efficiently
Software can automate many aspects of progress billing. Automation significantly reduces the time your staff spends preparing and submitting AIA-style billing documents. Look for software that includes automated calculations, data integration, and streamlined workflows.
Cost Tracking Integration
Construction software can integrate with project management and accounting systems. This allows for real-time tracking of job costs and work completed. Working with accurate and up to date project and job cost data makes it easier to stay on top of your AIA-style billing and submit the correct information.
Handle Change Orders More Easily
Choose construction software that includes features for managing change orders. That will make it easier to track and manage any updates for your AIA-style billing process. Using integrated cost data reduces the risk of errors and ensures that all changes are properly accounted for.
Reduce Disputes and Rejections
Accurate, consistent AIA-style billing documents produced using construction accounting software minimize disputes and rejections. Use software with automated error checking and validation features to ensure your forms are correctly filled out before you submit them.
Integrate Seamlessly with Your Accounting Systems
Use construction accounting software with integrated AIA-style billing features to eliminate double entry of data. An integrated system ensures data flows seamlessly between departments project management and accounting and helps you reduce the risk of errors.
Manage Retainage
Retainage is an amount of money withheld from contractors and suppliers until the end of a construction project. Retainage must be tracked alongside payments as the job progresses. Construction accounting software can help you manage retainage by accurately calculating and tracking the withheld amounts. This means your retainage is properly accounted for in all your billing documents.
Regulatory Compliance
Contractors must adhere to many regulatory and contractual requirements. Using construction accounting software to manage your billing helps you stay compliant by providing up to date templates and ensuring that all necessary information is included in billing documents.
Stored Materials
Using AIA-style billing will allow you to invoice for materials that have not yet been used on a job. This benefit helps offset the difficulty of balancing materials procurement against keeping cash on hand. Additionally, your software will track and manage billing for stored materials, so you don’t accidentally double bill.
Improve Communication
Using construction accounting software to help manage your AIA-style billing helps provide accurate, up to date information about your progress claims. Transparent data helps reduce misunderstandings and payment delays.
Conclusion
Construction software that supports AIA-style billing helps contractors by automating and streamlining the billing process, reducing errors, improving accuracy, and ensuring compliance. This leads to faster payments, better cash flow management, and more efficient project management.
Learn more about JOBPOWER construction accounting software and/or request a free demo.
Sign up for more great construction accounting content on the JOBPOWER blog.
You may also like
