Whether you’re a general contractor, project manager, subcontractor, or another member of the team, a payment application is a critical document that should be prepared with care and attention to detail.
Your schedule of values must be accurate and up-to-date, because it serves as a binding agreement between the owner and the contractor. It will be used to track the progress of the construction project and to allocate payments to the contractors and subcontractors involved in your project.
With such an important document, you need it to look professional, and make it easy for everyone to read and understand.
That’s why we have a Free Construction Payment Application Template for you to use below that makes it easy to submit your schedule of values quickly while looking great.
The primary purpose of building out a schedule of values (SOV) is to provide a detailed breakdown of the costs a subcontractor will need to invoice over the project lifecycle. It is a document that outlines the scope of work, the estimated cost of each part of the work, and the percentage of the total project cost that each part represents. It is also used to ensure that the distribution of payments is aligned with the completion of the work and that each party involved in the project is paid fairly for the work they have performed. In summary, a schedule of values serves as a roadmap for the project's financial progress, helping to ensure that the project stays on track, both in terms of cost and schedule.
To build out your Schedule of Values, review your associated construction documents and specifications to get a clear understanding of the scope of work for each part of your project. Then, break down your scope of work into smaller, more manageable parts and allocate a cost to each part. Estimate the cost of each part of your work, taking into account the cost of materials, labor, equipment, and any other expenses. Finally, submit your schedule of values to your general contractor or construction management firm and owner for review and approval.
The schedule of values is typically filled out by the contractor or the construction manager who is responsible for managing the construction project. In some cases, an architect or an engineer may be involved in the preparation of the schedule of values. Once the schedule of values is approved, it becomes a binding agreement between the owner and the contractor, and any changes to the scope of work or the cost of the project must be reflected in the schedule of values.
An application for payment is a request for payment for work that has been completed on a construction project. This form is usually submitted by the contractor to the owner or the owner's representative, and it typically includes a description of the work that has been completed, the amount of the payment request, and any supporting documentation, such as invoices and receipts.
We've been in the construction industry for over 12 years, and have been helping general contractors and subcontractors just like you with all your project management needs. We know how difficult it is to standardize your construction process and wanted to provide a free template to help you get more organized. We also know how often you’re on the go and pressed for time, which is why we wanted to provide you with something you can download and use right away.
There are 4 types of Payment Applications. Our free template helps you create all of these: Preliminary Notice: A preliminary notice is a document that is sent by a subcontractor or supplier to the owner and the contractor, indicating that they will be supplying labor or materials for the construction project. Application for Payment: An application for payment is a way for subcontractors to bill-out their present application and/or stored material for each pay period and keep track of the payments they have received. This request for payment is then typically reviewed by the general contractor, owner and sometimes an architect/engineer. Progress Payment: A progress payment is a payment that is made to the contractor for work that has been completed up to a certain point in time. Progress payments are typically made based on the completion of specific milestones or the completion of a certain percentage of the work. Final Payment: A final payment is a payment that is made to the contractor once all of the work has been completed and the project has been accepted by the owner. Retention Payment: A retention payment is a payment that is held back by the owner or the contractor as security for any defects or outstanding work that may need to be corrected after the project has been completed.
A Construction Payment Application is typically considered to be a legally binding document, as it is usually included as a part of the construction contract between the owner and the contractor. The schedule of values outlines your estimated cost for each part of your work, the percentage of the total project cost that each part represents, and serves as a roadmap for your project's financial progress. Once the schedule of values is approved and signed by the owner and the contractor, it becomes a binding agreement that both parties are expected to follow. Any changes to the scope of work or the cost of the project must be reflected in the schedule of values, and payments to the contractors and subcontractors involved in the project are usually made based on the completion of the work as outlined in the schedule of values. In the event of a dispute between the owner and the contractor, the schedule of values may be used as evidence in a court of law to determine the proper distribution of payments. For this reason, it is important that your schedule of values is accurate, comprehensive, and up-to-date, and that both parties fully understand the terms of the agreement.
BuildingBlok is a construction project management system that helps subcontractors, and general contractors manage their projects with tools for ASIs, Bidding, Change Orders, Daily Reports, Payment Applications, RFIs, Submittals and Timesheets.
We've helped many customers like you switch from the messy process of updating and tracking pay apps through email and excel to a system that's easy for your whole team to use and does much of the work for you. From centralized logs, to easy to track approval chains, and clear audit trails, BuildingBlok is built with you and your team’s needs in mind.
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