General Inquiries

Corrections to Pay Applications

  • 1.  Corrections to Pay Applications

    Posted 12-04-2019 19:30
      |   view attached
    I am new to construction accounting but have been using the AIA Document G702 and the Continuing Sheet to file our Pay Applications.  What do you do to correct arithmetic errors in prior pay applications.  Is there a separate form to make those corrections?  What I've attached is a spreadsheet showing what we invoiced for, and then a corrected version I completed after my audit.

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    Glenn Chinn
    Managing Partner
    Studio 1Thousand LLC
    Seattle WA
    (206) 723-4710
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    Attachment(s)



  • 2.  RE: Corrections to Pay Applications

    Posted 12-05-2019 08:18

    Sorry, didn't go to the trouble of looking at your spreadsheet, but if you use the actual total amount paid from previous pay apps, erroneous or not, with the most current pay app, the correction should take care of itself with the most current pay app.

     

     

    Robert McManus

    Chief Financial Officer

    Direct: 404.965.9349 

    Main: 404.361.5154 | Fax: 404.965.9355

    PO Box 45717 | Atlanta, GA 30320

    www.msrs.com

     

     

     

     

     






  • 3.  RE: Corrections to Pay Applications

    Posted 12-05-2019 08:35
    AIA G702 and 703 should have formulas built in that prevent you from making a mistake. Looks like some of these pay apps were completed in Excel instead. As Robert mentioned, AIA looks at Total JTD billings and once you enter the correct completed to date on the next pay app, the error will be corrected. Auditors generally analyze completed jobs and final bills so as long as the final bill is correct you should not have an issue. You may note in the project file that that 4-7 are incorrect but mainly for internal reference. Assuming that these bills went to the client and payment was received. If not, or the client is questioning it, and wants them corrected, then you could void each of the bills starting with the most recent one and reenter with the correct spread and resubmit to client. I would refrain from making these changes if you already received payment matching the presented pay apps since it will throw a discrepancy between yours and client records. Be upfront with the client that you found an error in the formulas before you submit the corrected pay app.

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    Angel Goldman CCIFP, MBA
    CFO
    Bartlett Brainard Eacott
    Bloomfield CT
    (860) 922-5009
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  • 4.  RE: Corrections to Pay Applications

    Posted 12-05-2019 09:16

    Glenn,

    Welcome to the fold. I would not make any corrections on prior pay apps that have been submitted. Just make all of your corrections on the current pay app. If your owner needs an explanation, then attach what you have attached here as back-up. It looks like the only issue is the retention calc. Chances are your owners AP software is reflecting the correct retention in their system already. Did they pay you what you list as current payment, or did they pay you progress less 10%? Regardless, just correct your retention to be 10% for the completed to date on your current pay application.

     

    Eileen Cigala | DPR Construction | www.dpr.com
    222 N. 44th Street | Phoenix, AZ | 85034
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