Construction invoicing isn't like invoicing in other industries. A general contractor on a commercial project doesn't send a PDF with a dollar amount — they submit a payment application with a schedule of values, a continuation sheet, conditional lien waivers for all sub tiers, and sometimes certified payroll. Getting paid fast means having that package complete, correct, and submitted on the day the contract specifies.
Labor records from construction time tracking software feed directly into the billing process — T&M invoices pull from timesheet exports, certified payroll billing requires GPS-verified hour records, and progress billing percent-complete calculations are supported by documented labor hours by cost code. This guide covers every invoice type used in construction, what must be included, common billing mistakes, and copy-ready templates.
For contractors who need cleaner field records, construction photo documentation software can also help support percent-complete claims, progress billing, and owner communication.
Different contract structures require different invoice formats.
Standard format for commercial GCs on lump sum and GMP contracts. Billing organized by line item (the schedule of values), showing original contract value, work completed to date, retainage held, and amount due this period.
Used with: Lump sum contracts, GMP contracts, design-build
Requires: AIA G702 (application for payment cover sheet) + G703 (schedule of values continuation sheet)
Line-item invoice showing actual labor hours, materials, and equipment used — plus the applicable markup. Labor hours come directly from the construction timesheet app.
Used with: T&M contracts, change order work billed T&M, extra work orders
Requires: Timesheet backup by worker, material receipts, equipment log
Billing based on measured quantities of completed work × unit price from the contract. Common in civil and site work.
Used with: Unit price contracts (road work, utilities, earthwork)
Requires: Field measurement verification, owner-certified quantities
Simplified progress billing — owner and contractor agree on milestone or percent complete, payment releases accordingly. Common on smaller projects without a formal schedule of values.
Used with: Residential, smaller commercial, specialty subcontracts
Requires: Percent complete agreement, photographic documentation
The AIA G702/G703 is the most widely used billing format in commercial construction. Understanding every field eliminates billing disputes before they happen.
Header fields:
To Owner: [Owner name and address] Project: [Project name and address] Contract For: [Brief scope description] Contract Date: [Date of prime contract] Application No.: [Sequential — Application #1, #2, etc.] Period To: [Billing period end date] Architect's Project No.: [If applicable] Financial summary fields:
1. Original Contract Sum: $[original contract value] 2. Net Change by Change Orders: $[approved COs to date, net of credits] 3. Contract Sum to Date: $[Line 1 + Line 2] 4. Total Completed and Stored: $[from G703 Column G total] 5. Retainage: a. % of Completed Work: $[retainage % × completed work] b. % of Stored Material: $[retainage % × stored materials] c. Total Retainage: $[5a + 5b] 6. Total Earned Less Retainage: $[Line 4 − Line 5c] 7. Less Previous Certificates: $[total previously paid, per G702 history] 8. Current Payment Due: $[Line 6 − Line 7] 9. Balance to Finish Including Retainage: $[Line 3 − Line 6] Contractor certification (G702 bottom): Contractor certifies the work has progressed as indicated, quality is in accordance with the contract documents, and the amount certified is due and owing. Notarization may be required depending on contract or jurisdiction.
The G703 breaks the contract into line items — each representing a scope element with its own budget, completion percentage, and dollar value.
Column structure:
A: Item No. B: Description of Work C: Scheduled Value (budget per line item) D: Work Completed From Previous Application E: Work Completed This Period F: Materials Presently Stored G: Total Completed and Stored (D+E+F) H: % (G÷C) I: Balance to Finish (C−G) J: Retainage Line item example:
Item | Description | Value | Prev | This | Stored | Total | % | Balance -----|-------------------|----------|---------|---------|--------|----------|-----|-------- 1.1 | Mobilization | $12,000 | $12,000 | $0 | $0 | $12,000 | 100%| $0 1.2 | Site Demo | $28,500 | $18,525 | $9,975 | $0 | $28,500 | 100%| $0 2.1 | Concrete Footing | $67,000 | $0 | $40,200 | $0 | $40,200 | 60% | $26,800 2.2 | Structural Steel | $145,000 | $0 | $72,500 | $0 | $72,500 | 50% | $72,500 Setting up the schedule of values: The schedule of values is negotiated with the owner/architect before the first billing. Front-loading (inflating early items to improve cash flow) is a common tactic but owners and architects push back — they look for front-loading and may reject applications that don't reflect actual percent complete.
Percent complete on each line item should be supportable by field documentation — photographs, daily reports, and construction time tracking hours by cost code. An owner who disputes the 60% complete claim on concrete footings gets GPS-verified labor hours showing the work performed.
If your team needs better field documentation, photo documentation for general contractors can help connect daily jobsite progress to billing support.
T&M billing is the most documentation-intensive invoice type — and the most defensible when backed by proper records.
==================================================== TIME AND MATERIAL INVOICE ==================================================== [Company Name] [Address] [Phone] | [Email] [License No.] Invoice No.: [Sequential number] Date: [Invoice date] Project: [Project name and address] Contract/WO No.: [Reference] Billing Period: [Start date] – [End date] Due Date: [Net 30 from date, or per contract] ---------------------------------------------------- LABOR ---------------------------------------------------- Date Name Classification Hours Rate Total -------- ----------- --------------- ----- ------- -------- 08/04/26 J. Martinez Foreman 8.0 $95.00 $760.00 08/04/26 T. Nguyen Journeyman Carp. 8.0 $78.00 $624.00 08/04/26 R. Davis Laborer 8.0 $52.00 $416.00 08/05/26 J. Martinez Foreman 8.0 $95.00 $760.00 08/05/26 T. Nguyen Journeyman Carp. 8.0 $78.00 $624.00 -------- Labor Subtotal: $3,184.00 Labor Markup (15%): $477.60 LABOR TOTAL: $3,661.60 ---------------------------------------------------- MATERIALS ---------------------------------------------------- Date Description Qty Unit Unit Cost Total -------- ---------------------- ---- ------ --------- -------- 08/04/26 2×6 Studs 8' 120 EA $4.25 $510.00 08/04/26 OSB Sheathing 4×8 60 Sheet $28.50 $1,710.00 08/05/26 LVL Beam 3.5×14×16' 4 EA $186.00 $744.00 -------- Material Subtotal: $2,964.00 Material Markup (10%): $296.40 MATERIAL TOTAL: $3,260.40 ---------------------------------------------------- EQUIPMENT ---------------------------------------------------- Date Equipment Hours Rate/Hr Total -------- ---------------- ----- -------- -------- 08/04/26 Telehandler 8.0 $85.00 $680.00 08/05/26 Telehandler 8.0 $85.00 $680.00 -------- Equipment Subtotal: $1,360.00 Equipment Markup (10%): $136.00 EQUIPMENT TOTAL: $1,496.00 ==================================================== INVOICE SUMMARY ==================================================== Labor Total: $3,661.60 Material Total: $3,260.40 Equipment Total: $1,496.00 ---------- SUBTOTAL: $8,418.00 Sales Tax (if applicable): $0.00 ---------- INVOICE TOTAL: $8,418.00 Less Previous Payments: $0.00 ---------- AMOUNT DUE: $8,418.00 Payment Terms: Net 30 Make checks payable to: [Company Name] ACH/Wire: [Bank routing / account info] ==================================================== ATTACHMENTS ==================================================== ☐ Signed daily T&M tickets (all dates) ☐ Timesheet export from [construction time tracking app] ☐ Material receipts / delivery tickets ☐ Equipment rental invoices (if applicable) ☐ Conditional lien waiver (this period) ==================================================== Labor hours on T&M invoices must match timesheet records. When daily hours come from GPS-verified time card apps for construction — with timestamps and location stamps — an owner who disputes labor hours faces digital records, not handwritten timesheets. This is the difference between a T&M invoice that gets paid and one that generates a call asking for proof.
|
Document |
Progress Billing |
T&M |
Unit Price |
|---|---|---|---|
|
Signed T&M tickets |
— |
Required |
— |
|
Timesheet export |
Optional (supports % complete) |
Required |
Optional |
|
Photographs of work |
Recommended |
Recommended |
— |
|
Material receipts/delivery tickets |
— |
Required |
— |
|
Conditional lien waiver (this period) |
Required |
Required |
Required |
|
Unconditional lien waivers (prior period) |
Required |
Required |
Required |
|
Sub conditional waivers (this period) |
Required |
Required |
Required |
|
Sub unconditional waivers (prior period) |
Required |
Required |
Required |
|
Certified payroll |
Prevailing wage projects |
Prevailing wage projects |
Prevailing wage projects |
|
Change order log |
Recommended |
N/A |
N/A |
Lien waivers: Most commercial payment applications require conditional lien waivers from the GC and all sub tiers for the current billing period, plus unconditional waivers (confirming prior period payment was received) from all sub tiers. Missing waivers from a single sub stop the entire billing application.
Construction employee time tracking app exports are increasingly accepted — and sometimes required — as timesheet backup for T&M billing and certified payroll. GPS-verified exports show worker name, date, clock-in/out times, location, and total hours — more complete than any handwritten timesheet.For more resources on contractor timesheets, see GPS timesheets for contractors.
Most commercial construction contracts hold retainage — typically 5–10% of each payment application — in reserve until substantial completion or final completion. See Construction Retainage for the full retainage management guide.
On the G702: Retainage appears in lines 5a and 5b, reducing the Current Payment Due (line 8). Track cumulative retainage held in the G702 history — it's a receivable that must be actively managed and released.
On T&M invoices: State the retainage percentage and dollar amount explicitly on the invoice. Calculate: Labor + Material + Equipment subtotal → apply retainage % → show net amount due after retainage.
Retainage reduction: Many contracts allow retainage reduction to 5% (from 10%) after 50% completion, or at substantial completion. Track this proactively — owners don't typically volunteer retainage reductions; the contractor must request them per the contract terms.
Submit on the contract-specified date. AIA contracts typically specify the 25th of the month or the last day of the period. Missing the submission date often pushes payment to the next cycle — a 30-day delay on every invoice that slips.
Know the approval chain. Who reviews the application? Architect first, then owner? Just the owner? Construction manager? Each additional approval step adds 3–7 days. Submitting to the wrong contact at step 1 starts that clock over.
Submit complete the first time. An incomplete application gets returned — missing lien waiver, missing certified payroll, unsigned T&M ticket. Every return cycle costs 7–14 days. Build a pre-submission checklist and run it before every application goes out.
Front-load where possible within reason. The schedule of values is negotiated — allocate higher values to early items (mobilization, site work, foundations) to improve early-project cash flow. Architects will flag obvious front-loading but reasonable allocations are standard practice.
Track payment receipt against due dates. Contract specifies owner pays within 30 days of application — calendar it. On day 31 without payment, send a formal follow-up. Prompt payment laws impose interest on late payment in most states.
For teams that need stronger daily records, jobsite photos and daily progress tracking can help support payment applications.
Contractors that want to manage labor records, jobsite updates, and project communication in one place can explore TaskTag construction software.
Missing or incorrect supporting documentation The single most common cause of delayed payment. Build a document checklist per invoice type — run it before submission, not after the call asking for what's missing.
Overbilling percent complete Claiming 80% complete on a line item that's 60% complete invites a site visit and a revised application. Legitimate documentation — photographs and construction crew time tracking hours by cost code — supports honest percent complete claims. Overbilling damages trust and creates disputes.
Submitting to the wrong contact The project administrator is often not the same person as the accounts payable contact. Confirm the submission address for payment applications at project kickoff — not after the first missed deadline.
Not tracking what's been paid vs. billed G702 line 7 (Less Previous Certificates) must match the actual payment history. Errors here create reconciliation disputes. Maintain a running payment log: application number, amount applied, amount certified, amount paid, date paid.
Letting sub waivers lag GC conditional waivers are easy to produce. Sub waivers require coordination — a sub who won't provide a waiver until they're paid creates a waiver gap that holds the GC's entire application. Build sub waiver collection into the pay cycle, not the day before the application is due.
No change order tracking on the billing Approved change orders increase the contract sum (G702 line 2). Unapproved change orders should appear as pending items separate from the main application. Mixing approved and pending COs into the base application creates disputes.
For examples of how contractors improve coordination and documentation, see this construction project management case study.
Before submitting any invoice:
Use these resources to improve construction billing, documentation, and project management workflows.
For more contractor workflow articles, visit the construction management resources library.
If you want to see how TaskTag works for construction teams, you can book a TaskTag demo.
You can also download the TaskTag app to manage projects from the field.
Invoices get approved faster when your field records are complete.
TaskTag helps contractors organize jobsite photos, crew updates, timesheets, project notes, and documentation in one place, so billing backup is easier to find when it matters.
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