AIA billing, a.k.a. progress billing, lets contractors and subcontractors get paid throughout the course of a project while balancing risk for owners and GCs. In theory, it’s a well-orchestrated rhythm that keeps the project moving forward, invoices going out, and money flowing into your bank account. In reality, it’s a nightmare of paperwork, customized forms, payment portals, and a neverending stream of missing information.
If you’re new to AIA billing, check out this article covering almost everything there is to know about it. If, on the other hand, you’re well-acquainted (and possibly fed up) with this standard construction billing process, you’re in the right place. This article covers the:
- Challenges with AIA billing;
- Promises of AIA billing software;
- Signs that you need AIA billing software; and
- AIA billing software designed specifically for subcontractors’ workflows.
Challenges with AIA Billing
It would be great if AIA billing were as simple as sending invoices on the first of every month. But it’s not that straightforward. AIA billing is wrought with challenges that can be daunting to even the most experienced professionals. A few of these hurdles are listed here:
- Most GCs don’t use the standard AIA form. Unlimited access to AIA forms costs $1,600 per year, so many GCs create their own versions. This would be fine if they were all identical. But everyone winds up making minor modifications, and before you know it, there are thousands of versions of progress billing forms out there.
- AIA billing favors project owners. It doesn’t take the workflow or needs of subcontractors into consideration. Project owners control the forms, the billing schedules, and the submission processes.
- AIA billing is complicated. You have to gather a lot of documentation to submit a progress payment application. And if you make any mistakes on your billing forms, the whole pay app is likely to be kicked back to you, causing significant payment delays.
- Accounting software doesn’t help. Your accounting software can handle a lot of your accounts receivable processes—like generating invoices and tracking payment status. It might even include standard AIA forms. However, it’s not designed to support most of the processes involved with AIA billing, specifically all of those unique billing forms GCs make.
Enter AIA billing software.
Benefits of AIA Billing Software
Over the last decade, construction companies have readily embraced new software solutions to solve their most urgent and labor-intensive problems. One of the latest innovations to hit the industry is AIA progress billing software, which is designed to streamline the progress billing process.
With AIA billing software, subcontractors can:
- Generate payment applications significantly faster
- Reduce billing cycles and get paid faster
- Streamline billing workflows
- Automate form management
- Set reminders for progress payment schedules
- Keep field teams and the back office on the same page
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Delete Your Sheets: Streamline Billing to Get Paid Faster
8 Signs You Need AIA Billing Software
Not everyone needs AIA billing software. If you run a small subcontracting company that only works on one or two projects at a time, this type of software probably doesn’t make sense for your business. However, AIA billing software can alleviate many of your billing challenges if you’re billing multiple monthly projects to several clients.
Here are eight signs that you might want to take a progress billing tool for a spin.
1. You spend so much time filling out progress billing forms that you’re starting to see them in your sleep.
Whether it’s the standard G702 and G703 forms or a GC’s custom version, manually completing progress billing forms can take a lot of time. And the more projects your company’s working on, the more forms you have to complete. It’s a constant cycle that causes lost productivity.
2. More than one of your GCs has their own custom forms.
Many GCs don't want to deal with paying for AIA forms, so they make their own versions. Once you get into these custom forms, even if the requirements match AIA forms, there’s no way to pull them into your accounting software. Then, you wind up having to edit PDFs in Bluebeam or Acrobat.
3. You’re managing pay apps in spreadsheets.
Whether or not your accounting software includes AIA billing forms, chances are you’re managing at least part of the process on spreadsheets. This opens you up to just as much risk if you were doing the entire workflow manually outside of your ERP. It’s easy to mess up the math, break an equation, forget to bill retention, fail to collect supporting documentation, miss a draw, etc.
4. You’re constantly worried about forgetting a progress billing date.
It wouldn’t be so bad if all AIA billing forms were due on the first of the month—or any other standardized date. But the fact that every GC has their own billing schedule makes it impossible to remember what’s due when. And if you miss a due date, you miss that pay cycle.
5. You’re tired of fire drills to fix rejected pay apps.
Payment applications have to be perfect. If your math is wrong, you use the wrong form, you forget a supporting document, or the GC thinks you’ve overbilled, they will kick it back. This rejection can happen even just a few hours before the submission deadline, forcing you to enter crisis-management mode as you rush to fix and resubmit the application before the deadline (and risk delaying payment).
6. You work with a dozen different GCs, and they each use a different submission portal.
In most industries, submitting invoices is pretty simple—you just email them over to a designated billing email address. But in construction, it’s a bit more complicated than that. Every GC has unique submission instructions you have to follow. Some might require you to send your AIA billing forms via email, fax, or even mail. Others will use a payment portal, like Textura or GCPay. Unfortunately, ERPs and accounting systems don’t integrate with payment portals. So, every payment portal means one more login to track, a system to learn, and a process to manage.
7. Your accounting team doesn’t have a centralized place to store all project billing forms.
File management is always a challenge. Sure, some people on the team are probably great at uploading all their documents to a shared company drive. But there’s always someone who’s notorious for saving important documents to their local hard drive. Or having multiple versions with no standard approach to version control. This disjointed approach to managing progress billing forms is a recipe for disaster.
8. You must collect lien waivers from multiple lower-tier subs before getting paid.
Unfortunately, AIA billing forms aren’t the only documents required for progress billing. Every time you send a payment application, you must include the appropriate lien waivers for your company and any lower-tier subs you’ve pulled in on the project. If you’re working with more than one or two lower-tier subs at a time, this can quickly become cumbersome.
Unfortunately, almost all ERPs and accounting software don’t handle this process. But the right AIA billing software will.
The First AIA Billing Software Built for Subcontractors
Siteline is the only software on the market built to handle subcontractors’ billing workflow. One of its key advantages is the ability to reproduce any custom form and send it directly to the GC through their preferred portal. Siteline streamlines the progress billing workflow from start to finish, resulting in fewer errors, delays, and fires you need to put out.
Subcontractors who use Siteline can:
- Complete billing forms in minutes.
- Generate pay apps according to each GC’s specifications.
- Monitor the real-time status of every invoice.
- Get paid an average of three weeks faster.
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