What a schedule of values is actually for
A schedule of values (SOV) breaks the lump-sum contract into priced line items that add up to the contract sum. It exists so that progress payments can be calculated from completed work rather than from a contractor's cash needs. Owners and lenders approve it before the first invoice precisely so there is no argument later about what each percentage of completion is worth.
This means the SOV is a control document, not an administrative formality. If the line items do not reconcile to the contract sum — including approved change orders — the pay application is arithmetically wrong and will be rejected, delaying cash that your crew has already earned.
Σ Scheduled values = Original contract sum + Approved change ordersThe G702 nine-line calculation, in order
AIA's G702 asks nine questions. Each one depends on the answer above it, which is why a spreadsheet beats a form: one change updates the whole application.
| Line | Description | Formula |
|---|---|---|
| 1 | Original contract sum | From the executed agreement |
| 2 | Net change by change orders | Approved COs only |
| 3 | Contract sum to date | 1 + 2 |
| 4 | Total completed and stored to date | Σ G703 column G |
| 5 | Retainage | − (4 × retainage rate) |
| 6 | Total earned less retainage | 4 + 5 |
| 7 | Less previous certificates | Prior applications |
| 8 | Current payment due | 6 + 7 |
| 9 | Balance to finish including retainage | 3 + 5 − 4 |
Retainage is your largest unsecured receivable
At 10% retainage on a $412,000 contract, you are withholding $41,200 of your own cash until substantial completion — and often for the duration of a warranty period beyond that. Retainage is normal, but it needs to be modelled as a cash requirement rather than discovered as a surprise.
The third tab of the workbook schedules retainage month by month and shows exactly when each withholding releases. On jobs longer than six months, that schedule belongs in your cash flow forecast, not just in the pay application file.
- Retainage is typically halved at 50% completion on many public projects — check the contract.
- If you have retainage payable to your own subcontractors, align your terms with the owner's terms to avoid financing their share.
- Track retainage as a receivable with an ageing, and chase release date as actively as you chase payment.
Build a billing rhythm that keeps cash ahead of cost
Most subcontracts define a monthly billing cycle: work completed through a cut-off date, application submitted, certification, payment within 30–45 days. That means the cash for work you did in March may arrive in mid-May. Understanding that lag — and billing every period without exception — is the difference between a contractor who sleeps and one who does not.
The discipline that matters: bill the maximum supportable percentage, on time, every month, with backup attached. Missing a billing deadline effectively extends your float by a full month for free — to the owner.
- Bill on the same day every month, whether or not you have a big number to report.
- Attach backup: approved sub invoices, stored materials documentation, signed daily reports.
- Never bill more than your supportable percentage of completion — it creates a line-9 imbalance that ends in a clawback.
- Reconcile retainage quarterly against the contract to catch clerical drift early.
How to use this tool
- Load the contract item master. Break the contract into priced line items and confirm the total equals the contract sum plus approved change orders. Resolve any variance before billing.
- Enter this period’s completed work. Update the this-period column per line. Keep previous-completed intact so the cumulative curve stays accurate.
- Verify the G702 lines. Check the current payment due and the balance to finish. If line 9 looks wrong, trace it back to an over- or under-billed line item.
- Download and schedule the retainage release. The workbook’s retainage ledger shows what is withheld each month and when it releases, so it can go straight into your cash flow forecast.
What is inside the download
A contract item master that reconciles to the contract sum, a G702/G703-format application with all nine lines as live formulas, and a month-by-month retainage ledger showing exactly when each withholding releases.
Contract Item Master— a separate worksheet inschedule-of-values.xlsx.Application G702 G703— a separate worksheet inschedule-of-values.xlsx.Retainage Release Ledger— a separate worksheet inschedule-of-values.xlsx.