What is a Cash Flows Statement?

Costs in excess of billings (often called underbillings or earnings in excess of billings) is an asset account on a construction company’s balance sheet representing work performed and expenses incurred that have not yet been billed to the general contractor or project owner.

Underbillings occur when continuous jobsite expenses—such as labor, materials, and mobilization—outpace periodic progress billing cycles or when work is performed on unapproved change orders. Under the percentage-of-completion accounting method, costs in excess of billings reflect earned revenue that will be converted into formal accounts receivable on the next pay application.

How Siteline Helps:
Underbilling ties up cash flow and risks leaving earned revenue on the table. Siteline provides real-time visibility into unbilled work, pending change orders, and job completion milestones—helping trade contractors generate accurate pay apps quickly and turn earned revenue into collected cash.

AIA® billing is a standardized payment application process for construction projects. Developed by the American Institute of Architects (AIA®), it uses specific forms—primarily the G-702® Application and Certificate for Payment and G-703® Continuation Sheet—to document and request progress payments throughout a project. These forms create a uniform system for contractors that shows exactly what work has been completed, what materials have been stored, and what payment is due during each billing period. They also require detailed information about contract values, change orders, and retainage amounts. AIA® has become the industry standard, especially for larger commercial projects and government contracts.

For subcontractors, understanding AIA® billing is essential since most large general contractors (GCs) require these forms or customized versions of them. While AIA® billing can initially seem complex, it provides important benefits like reducing payment disputes, creating clear documentation of work progress, and often resulting in faster payments. Mastering AIA® billing opens doors to working with larger GCs and bidding on more substantial projects. That’s why we created this comprehensive guide, filled with detailed information on completing AIA® billing forms and managing the payment application process.

Siteline simplifies the AIA® billing process by automating form creation and submission. Our system maintains an extensive library of custom billing forms from general contractors across the country, enabling subcontractors to generate perfect pay apps in minutes for fewer delays and faster, more predictable payments. Schedule a no-obligation demo to see how Siteline can help you streamline AIA® billing and reduce invoice aging by at least 30%.

A deduction in the construction industry refers to a reduction or subtraction of expenses or costs incurred during a construction project. Typical deductions may include costs of materials, labor, damage repairs or maintenance, and professional fees such as architect or engineer services. It is essential for construction businesses to keep track of these expenses as they can be beneficially used for tax deduction purposes. The aim is to lower the overall taxable income, resulting in a reduced tax bill. However, it is crucial to ensure that all deductions comply with laws and regulations to prevent any potential legal implications.