Basics of AIA Billing for Construction Contractors

Being able to follow AIA billing standards opens opportunities to work on larger projects and bid on government-funded projects

While AIA billing has a bad rap for being confusing, cumbersome and time consuming, it is a manageable process with a lot of benefits.
While AIA billing has a bad rap for being confusing, cumbersome and time consuming, it is a manageable process with a lot of benefits.

The good news: you’ve landed a huge contract with a ton of potential for profit and growth. The bad news: it requires AIA billing, and you haven’t a clue where to start. You might be asking yourself, “What is AIA billing?” and “How do I do it?” and “Do I need specialized AIA billing software?”

First, don’t panic.

While AIA billing has a bad rap for being confusing, cumbersome and time consuming, it is a manageable process. In addition, because it is a form of progress billing, there are a lot of benefits to it. In this three-part series, we’ll provide all the answers you need for handling your first AIA job.

“Progress billing” simply means that you bill based on your progress on the job. The amount you bill is generally related to the percentage of completed work.

The biggest benefit of progress billing is that you don’t have to wait for arbitrary milestones (or even the end of the job) to bill. Instead, you bill to receive cash on a regular basis. That allows you to more easily control budgets, pay laborers and subcontractors, purchase materials, and manage other debts.

But there are other benefits. Paying in smaller installments is often easier on the customer and allows you to increase the likelihood you’ll be able to collect. It forces regular communication on the progress of a job, and requires you to have a good understanding of what might be going wrong.

The downside is that it’s not as simple as printing a deposit invoice and billing the remainder at the end of the job. Progress billing in any form requires quite a bit more math and accounting. And AIA billing is even more complex.

(read the entire article "Everything You’ve Always Wanted to Know About AIA Billing but Were Afraid to Ask" from Foundation Software...)


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