What is a G702 form?

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What is a G702 form?

Retainage is the withholding of a portion of the final payment for a defined period to assure a contractor or subcontractor has finished a construction project completely and correctly.

Q. How do you request retainage?

  1. Send a retainage invoice or application before the deadline.
  2. Send an invoice reminder (or several)
  3. Send a payment demand letter.
  4. Send a notice of intent (to lien)
  5. File a mechanics lien.
  6. Consider legal action.

Q. How do I invoice a retainage?

Withholding retainage from an invoice:

  1. Click the + symbol located at the top of the screen.
  2. Select Invoice.
  3. Select your customer.
  4. Fill out the remaining fields of the invoice, including the purchased line items.
  5. On the next available line of the invoice, select Retainage from the Product/Service column.

Q. When should you bill for retainage?

What Is Retainage? Also called “retention,” retainage is a percentage of a contract, often 5-10%, that can’t be billed until the entire project is complete and the client has approved the work. Its purpose is to give the client recourse if they aren’t satisfied with the work.

G702®GMP-2021 , Application for Payment for a COW Project with a GMP This form used when a contractor apply for payment, and an architect can certify payments are due, on a project where the basis of payment to the contractor is the cost of the work plus a fee projects that have a guaranteed maximum price.

Q. What is Retainage payable?

Q. What is Retainage on an invoice?

From Wikipedia, the free encyclopedia. Retainage is a portion of the agreed upon contract price deliberately withheld until the work is substantially complete to assure that contractor or subcontractor will satisfy its obligations and complete a construction project.

Q. How do you record holdbacks in accounting?

When issuing an invoice for your project, enter line items for the amounts owing, and create an additional line item on the invoice, as a negative amount, for the amount or percentage of the holdback. Specify the Holdback Receivable account (in the Acct column) and allocate the amount to the appropriate project.

Q. What is retainage on invoice?

Q. How do you record retainage payable?

Let me show you how:

  1. Go to the Accounting page, then Chart of Accounts.
  2. Click New.
  3. Under the Account Type drop-down menu, select Other Current Liabilities.
  4. On the Detail Type drop-down menu, choose Other Current Liabilities.
  5. In the Name field, enter Retainage Payable.
  6. Click Save and Close.

Q. What is a G703?

AIA Document G702®–1992, Application and Certificate for Payment, and G703®–1992, Continuation Sheet, provide convenient and complete forms on which the contractor can apply for payment and the architect can certify that payment is due.

Q. Is retainage an asset?

The contractor, to whom the retainage is owed, records retainage as an asset. Retainage receivable accounts have a normal debit balance; retainage payable accounts have a normal credit balance.

Q. Do you hold retainage on general conditions?

In most situations, retainage is not required but is allowed. And when it is allowed, it’s typically regulated or limited. Ultimately, whether or not retainage will be withheld often comes down to the contracting parties.

Q. What is normal retainage?

Retainage, also called retention, is an amount withheld from the contractor until a later date. It’s fairly common, especially on commercial and public construction projects, and typically ranges from 5 – 10% of the total contract price.

Q. What is a holdback on an invoice?

In the construction industry, holdbacks may be inserted into contracts as a way to protect the buyer, by “holding back” a portion of the invoice until all the work is complete. This allows the parties to complete the project on schedule.

Q. What is retainage in accounts payable?

Retainage is a portion of the agreed upon contract price deliberately withheld until the work is substantially complete to assure that contractor or subcontractor will satisfy its obligations and complete a construction project.

Q. What is materials presently stored?

Column F: Materials Presently Stored This includes materials and supplies relevant to the line item work that you already purchased but haven’t used them on the project yet. Only enter the value of materials purchased up until the end of the current application billing period.

Q. What is a Notice of retainage?

Retainage, also called “retention,” is an amount of money “held back” from a contractor or subcontractor during the term of a construction project.

The AIA G702 serves as both the contractor’s application and the architect’s certification. Its use can expedite payment and reduce the possibility of error. The form also allows the architect to certify an amount different than the amount applied for, with explanation provided by the architect.

Q. What is the difference between retention and retainage?

In construction, the terms retention and retainage are mostly used interchangeably. However, in some cases, there is a slight difference: Retainage in construction may refer specifically to the money that is being retained, while retention refers to the act itself.

Q. What is a retainage payment?

Retainage is the withholding of a portion of the funds that are due to a contractor or subcontractor until the construction project is finished. It is meant to serve as a financial incentive and an assurance that the contractor will complete the project in a satisfactory manner.

Q. Do you hold retainage on change orders?

Even though you don’t bill retainage until the very end, you should recognize it as a separate receivable amount while the job progresses. That means that you’re “holding” retainage on an ongoing basis. As you near the end of the job, you “release” the retainage — which usually makes up the final billing.

Q. How long is retainage held?

45 days
Retainage is held until 45 days after formal acceptance of the work. The department shall not retain funds if the contractor furnishes a retainage bond equal to 10 percent of the contract amount for projects less than $500,000 or 5 percent of a contract exceeding $500,000.

The contractor, to whom the retainage is owed, records retainage as an asset. The client, who owes retainage to the contractor, records retainage as a liability. Retainage receivable accounts have a normal debit balance; retainage payable accounts have a normal credit balance.

Q. What are the steps to collect retainage from a contractor?

Typically there are three steps to complete before the contractor can collect retainage. These three steps are: completing the punch list, putting together the close-out package, and submitting this invoice. Define a punch list as a list of minor details and leftover items related to the project.

Q. How to expedite the collection of retainage?

One way to expedite retainage collection is to devote personnel to monitor unbilled retainage. Having a close-out department, or a group devoted entirely to wrapping up projects and collecting retainage, ensures that such matters will be handled thoroughly and efficiently. It is also necessary to stay in touch with the client.

Q. Is there a retainage agreement on the job?

Accordingly, if no such agreement exists, there’s not retainage on the job! It’s pretty common for the parties to include some retention agreement within their construction contract. In fact, most of the popular form contractors (such as the AIA documents or ConsensusDOCS) contain retainage agreement provisions.

Q. Which is an example of a retainage receivable?

Once the project is completed, all the final details have been wrapped up, and the client is satisfied with the results, the client will pay the contractor the retainage amount. To the contractor, this example is the essence of the retainage receivables definition. To the client this is a real example of the retainage payable definition.

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How to fill out the AIA G702 Application & Certificate for Payment

Follow this step-by-step tutorial to make sure you get paid with your AIA G702 pay app, and learn more about construction pay apps at https://www.levelset.co…

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