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Progress billing & retainage,
worked line by line
The nine lines of a payment application, with retainage held at different rates on completed work and on stored materials, and the step-down at substantial completion that spreadsheets almost never get right.
The three places a payment application goes wrong
None of them is the arithmetic. All of them are the arithmetic being applied to the wrong figure.
One blended retainage rate. The application separates retainage on completed work from retainage on stored material because contracts frequently treat them differently — the standard rate on work in place, a lower rate or none at all on material that is properly stored and insured. A spreadsheet that multiplies the whole of line 4 by one percentage bills the wrong number in every month there is material on the ground, and nobody notices until someone reconciles retainage at the end.
The step-down nobody implements. Many contracts reduce retainage once the work passes an agreed percentage complete. It is worth real money, it happens exactly once, and the month it should happen looks like every other month in a spreadsheet. The reduction gets missed and the money sits with the owner until closeout.
Line 7 is what was certified, not what was billed. If a previous application was certified short, the difference does not disappear — it lands in this month's line 8. Carrying forward what you invoiced instead of what was certified is the single most common way an application comes back.
And then there is the part no calculator can help with: the waivers. A payment that is arithmetically correct still does not get released if the conditional waiver for this period, or the unconditional waiver proving the last one cleared, is not in the package for every party who has to sign one.
What this does not do
The limits, up front.
- It does not produce an AIA form. It works the arithmetic of the nine lines so you can check a figure or price a scenario. AIA document forms are licensed products of the American Institute of Architects; this page is not affiliated with or endorsed by them.
- It does not hold a schedule of values. One project, one period, in aggregate — not line by line, and it does not carry forward from last month.
- It does not know your contract. The retainage rates and the step-down threshold are whatever you type. Read the terms; this applies them, it does not find them.
- It does not track lien waivers — conditional, unconditional, per tier, per party — which is the thing that actually stops draws from being released.
- It is not legal or accounting advice, and retainage limits are set by statute in many states on public and some private work.
Common questions
Is retainage held on stored materials at the same rate as completed work?
Often it is not. Plenty of contracts hold the standard rate on work in place and a lower rate, or none at all, on materials properly stored and insured — and the application has separate lines for exactly that reason. A spreadsheet that applies one rate to the whole of line 4 will bill the wrong number every month there is stored material on the job.
What is the retainage reduction at substantial completion?
Many contracts step retainage down once the work reaches an agreed percentage complete — commonly half, sometimes at a lower rate on the balance, sometimes released entirely on the work already in place. It is worth real money and it is routinely missed, because the month it should happen looks like every other month in the spreadsheet. Read your own contract: this calculator applies whatever rule you give it, it does not know your terms.
Why is my current payment due lower than the work I completed this period?
Because line 8 is not the value of this period's work. It is total earned less retainage, minus everything previously certified. If a prior application was certified for less than you billed, or a change order was executed late, or retainage moved, the difference lands in this month's line 8.
What does a negative current payment due mean?
It means you have already been certified for more than you have now earned net of retainage — usually a change order that was deducted, a quantity that was corrected downward, or a prior over-billing. It is a real result and worth investigating rather than flooring to zero, which is what most spreadsheets quietly do.
Does this produce an AIA G702 form?
No. It works the arithmetic of the nine lines so you can check a figure or price a scenario. It does not generate the form, does not carry forward from last month, does not hold a G703 schedule of values line by line, and does not track lien waivers. AIA document forms are licensed products of the American Institute of Architects and this page is not affiliated with them.
If it is every draw, every month, with waivers attached
This page prices one period. Draw is the finished system: the G702 and its continuation sheet carry forward from the last application, retainage calculates itself including the step-down, and conditional and unconditional waivers are generated and tracked per party and per tier — so you know the draw is clean before you submit it, not after the general contractor calls.
It is live and loaded with a real-shaped project. There is a written five-minute walkthrough and the demo login is on the page — no call, no signup, no form.