It’s always exciting to be awarded a construction project. Then come some big words: AIA billing required. If you are a QuickBooks Online user, it may cause some additional panic since you have never seen those words anywhere in your software. There’s no reason to worry though; there are plenty of tools to help you with AIA billing
What is AIA Billing?
AIA billing is a standardized method for billing construction projects. It uses progress billing, a percentage-of-completion method for accounting, and compares prior period invoices with current period invoices. It’s a popular method for billing because the information tracking and sign-offs make it easier to collect money from customers.
What makes it difficult?
AIA billing gets tricky following the first invoice because of all the information you need to track. Part of AIA billing requires approval from the architect, general contractor, or owner for each invoice (called an Application for Payment). Sometimes they will want you to adjust amounts billed or the percentage completed before they sign off. As such, the original Application for Payment and Continuation Sheet with schedule of values will not always match the finalized versions. This difference often requires updating the previous application sections when you are starting on a new invoice and while the previous invoice is in the approval process.
How can I make AIA billing easier?
Several apps that integrate with QuickBooks Online have AIA billing features. These apps include:
- Knowify for Contractors
Odds are, you might already be using one of the above apps for your other construction needs. All three apps track the information needed for progress billing along with job costs, estimates, and compliance documentation tracking. The focus of the app differs slightly between which kind of contractors it was primarily built for. For example, Knowify for Contractors focuses mainly on remodelers, residential contractors, and commercial subcontractors, while CoreCon focuses on general contractors, residential contractors, subcontractors, and engineering firms.
If you would like help figuring out which AIA billing app would work best for you, please contact our Squire Quickbooks ProAdvisors at 801-225-6900 or find us online at www.squire.com. We have several specialists in the construction industry, and we are happy to help!