General Contractor Progress Billing & Invoicing Guide
Construction contracting requires strict accounting integrity to maintain cash flow across multistage residential renovations and commercial builds. General contractors and trade subcontractors must avoid informal billing notes in favor of structured progress billing that aligns with standard AIA (American Institute of Architects) draw schedules.#
1. Essential Elements of a Contractor Draw Request
Every construction invoice submitted to a project owner, bank lender, or commercial developer must detail: - Contract Reference & Change Orders: Original contract value, previously approved change orders, and newly requested revisions. - Schedule of Values (SOV): Itemized breakdown by trade milestone (demolition, foundation, framing, MEP rough-ins, drywall, finishes). - Previous Billed & Current Draw Amount: Percentage of completion achieved during the active billing period. - Retainage Withheld: Contractually agreed retainage (typically 5% to 10%) held in escrow until final inspection and Certificate of Occupancy.#
2. Managing Change Orders & Material Surcharges
Disputes in construction billing almost always stem from unapproved change orders. Protect your business by following these rules: - Never combine unexpected site conditions or client finish upgrades into general hourly labor. - Issue a numbered Change Order Request (COR) detailing material cost variations, additional subcontractor hours, and the revised contract total. - Attach the signed change order document to your progressive invoice to guarantee prompt lender approval.#