Construction Payment Applications Explained

Requesting a payment in the construction industry is not so straightforward. The industry is extremely complex and because of the complexities, additional documents supporting work completed is needed for an Owner or General Contractor to pay a Subcontractor. It’s very typical for a construction company to request something called a Payment Application or Pay App.   What is a Payment Application? 
  • A Pay App is a process that requires several documents to support the outstanding invoice before payment can occur. 
What should be included in a Pay App:
  • Project name and information
  • Schedule of values which outlines work completed and what materials have been delivered
  • Visual documentation like photos and drawings to backup completion data
  • Notes and reports documentation
  • Vendor invoices to highlight what is owed to suppliers 
  • Original contract amount
  • Change orders and documents to support them
  • Status of total amount earned to date and total amount received to date
  • What amount is currently due
  • Balance remaining total
  How can Harbr replace or be better than Payment Applications:   At Harbr, we are focused on enhancing a process that doesn’t just need a digital form, it needs an enhanced and collaborative workflow. Today, most payment applications or pay app softwares have no backbone for information that backs up the work done for an application for payment.    Harbr steps in provides the progress of work from the field, matches it to the schedule of values and payment application, brings it through the required approval layers, then either funds become available for alternative financing or there’s an approved payable that gets paid through EFT on normal pay cycles.   Accounts receivable departments are now connected to actual updates and accounts payable departments, now have a dependable audit trail and structure to help validate their payments.   If a PQS is inserted, they can now consume the same progress data, to help speed up their review and approval process whether that be for the client or the lender directly. Learn more at harbr.com