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I hate doing my Billings every month but I love it because I get paid listen if you're like me you probably hate and detest the payment application and the whole process as a whole because it's tedious it's complicated it's annoying and overall it's just a mission and you might think to yourself why do I even need it this is such a waste of time I know I did until I figured out exactly how to use it and then it became a valuable tool in my Arsenal it gave me the ability to never ever ever get taken advantage of in my contracts and my payments ever again listen if you're a business owner in construction you need to know construction law and more than anything you need to know the laws and the systems and the processes that go into getting paid so today I'm going to cover the payment application what it is how to fill it out and as a bonus a very unique strategy that I use on every single job to get paid faster and to get paid upfront more money in my contracts and I'm going to show you how to do that at the end of this video so what is the payment application the payment application is a monthly document that is designed to stress out contractors to to piss them off and to make them want to quit construction no I'm just kidding actually the created this payment application which is also known as the g702 or the g703 documents they're also known as application for payment or continuation sheet or schedule of values they created this to standardize the construction payment process which you're going to be able to use this to track your payments for legal issues and overall just regardless of whether you care for it or not if you're in commercial construction you need to know how to fill this out so how does it work so around the of every month you're going to prepare a schedule of values and calculate how much work was performed and how much material was delivered on site and where you project to be at the end of the month now this term project is amazing because none of us are Fortune Sellers and none of us know exactly where we're going to be in the next 10 or 15 days in terms of our construction project so that allows us to be aggressive with our bilding which means I'm going to show you exactly how to do this but if you are at the 20% Mark hey you might be at the 30% Mark you might be at the 40% Mark there's no reason that you can't be aggressive here actually I have a little secret that I'm going to let you in on that will literally get you paid upfront and get you paid money faster but I'm going to let you know what that is at the end of this video so the payment application basically has two documents the g702 application and the g703 continuation sheet or it's also known as a schedule of values or it's a breakdown of all of your cost for the job it's almost like an estimate the first step is you're actually going to fill out the second sheet which is the g703 and you're going to enter your schedule of values which is a breakdown of all your cost your percentages of completion your materials ordered and delivered on site and you're also going to include all the payments that you were previously given up to that point once you figure out what you're owed you're going to calculate your retainage which is typically about 10% retainage is kind of like an insurance policy to make sure that you finish the job correctly I mean we all know that contractors are all honorable people they never lie they never cheat they never steal they always finished the job properly I mean why do we even need retainage next we jump into the g702 payment application page but before you do go ahead and click the Subscribe button so you can get notified every time I create a new video listen I'm on a mission to help contractors grow their construction businesses so so this is the g702 payment application page this is actually the document that you're going to be certifying you're going to notarize it and submit this for payment so over here you're going to put your job information at the top your original contract sum which is your total contract value number two your approved change orders a change order is typically over the course of a project they're going to ask you to do additional things or things will come up and these are called change orders additional things to your contract so if you're not charging for change orders or don't know how I created a video right over here that's going to show you how to do that so A change order is basically an addendum to your contract if your contract value was let's just say I don't know $100,000 and you get a change order of $20,000 of additional work before you're doing your building you're going to submit a change order document or a potential change order which is like a it's almost like a mini contract saying I proposed to do this work for this amount and then they sign it and when you do that work you're going to actually be able to build a percentage of that work every month based on your percentage of completion and that is what you're going to put over here for change orders so number three is your contract sum to date which includes all of your change orders and your original contract number four is your total completed and stored to date which is the total that you've completed including all the labor and materials delivered to the job site and then you're going to get to the area of retainage which is typically about 10% unless you negotiate a different amount sometimes you might negotiate 5% sometimes you might get lucky and you have a good GC or a good owner and they don't charge you retainage but that's very rare and lastly number 6 through 9 is going to calculate basically everything that you're owed minus retainage minus what you've been paid for and this is how you're going to figure out what you're actually owed for that month so it's kind of tricky it's kind of like doing calculus for construction I remember back in the day when I really didn't know how to fill this out um I used to use Excel and I would literally block out two full days I would put my phone on do not disturb I would put my email on like I'm not here right now and I would sit with our account it and we would set up all our buildings for every single project and what kind of sucked every single month was that they always came back with issues and discrepancies and that we had to fix because the numbers didn't match because I'm telling you unless you're like an expert at this stuff it could get tricky especially the way they wor oh this line minus this line This minus retainage this less retainage it's kind of tricky nowadays they actually have software that does this for you uh Pro core coreon and there's a bunch of bunch of other ones now the moment of truth what is the strategy using this application and using the schedule of values that's going to get you paid faster and upfront for your projects it's a strategy that I call Strategic schedule of values this is actually how I manage the cash flow for a $7 million commercial drywall company we actually took that company from less than a million dollar a year to $7 million a year in two years and the only way we were able to do it was strategically maneuvering the money on the job so that we can get paid more upfront and faster and that's how we were able to scale our business because otherwise we would always have the money in the street we were never getting paid and I want to show you exactly how to get all that money up front so that you're not waiting for payments so I prepared a very very short mini video training probably as long as this video or maybe a little shorter that is going to walk you step by step on this strategic schedule of value system and process that I use and it's completely free click I'm going to put in the description below click it put your email in I'm going to send it to you and it's really going to help you with your cash flow in your [Applause] 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