Therefore, contractors would still have to manually match their invoices to their Accounts Payables and subcontractors would still manually check their bank accounts to verify their Accounts Receivables. But it usually requires upfront coordination for exchanging bank account details.Īlso, ACH transfers are typically disconnected from the accounting tools used in construction. There are various benefits to using ACH payments, such as: speed, security, and cost. Wire transfers are relatively expensive and incur fees on both the sender and receiver thus, the preferred option for most businesses has been to establish ACH payment infrastructure. With the advancement in technology and payment infrastructure, many companies are now opting to use electronic payment methods, such as wire transfers or ACH payments. Payments for construction invoices have been historically processed using paper checks that process has always encountered issues due to manual errors in writing the checks or having checks be lost in the mail. This means that subcontractors wait an average of approximately 83 days to receive payment for their services, according to a recent study by PWC. Typically, the contract also gives the contractor a duration of 30 days to process the payment after receiving it from the client. Most construction contracts between contractors and their subs are based on a Pay-When-Paid term – meaning that the contractor will pay the subcontractor after receiving payment from the client for the respective invoice. After receiving payment from the client, the contractor will process payment to the subcontractor.Contractor approves the invoice and the workflow moves to the payment process.Contractor reviews the invoice for accuracy and verifies that the invoice amount corresponds to the value of work performed by the subcontractor.Subcontractor submits to the contractor an invoice for work performed for the previous month (for example: the invoice is submitted on December 5th for work completed in the month of November).Supporting documentation typically, include but are not limited to: the schedule of values, lower-tier subcontractor invoices, and lien waivers. Contract amount and change order amount(s) if applicable.The time duration corresponding to the provided services and/or materials.The standard invoice template follows AIA Document G702 for contractors and G702S for subcontractors and contains the following:

Create a contractor invoice sample with the information below. Supporting information is also usually required. It follows the work required by the contract, including any change orders, to determine the amount due. Construction Invoicing Basics Invoice Template EssentialsĪ construction invoice or payment application provides an account of the work completed and materials provided through a certain time period – typically a month.

Examples of invoices for contractors