change orders G702 G703

How to Bill Change Orders on AIA G702/G703

Change orders are one of the fastest ways to turn a clean pay app into a rejection. This guide shows how approved change orders should flow through an AIA-style G702/G703 workflow so your totals tie out and your billing gets approved faster.

Quick answer:

Approved change orders affect your contract sum, your Schedule of Values (SOV), your G703 continuation totals, and your G702 summary totals. If one of those changes and the others do not, the pay application is likely to get kicked back.

Educational content. PayAppPro provides AIA-style outputs and is not affiliated with or endorsed by the AIA.

Create a Pay App in PayAppPro Rejection Checklist

Big rule: If the change order is not approved (executed), do not assume you can bill it. Many GCs, owners, and lenders will reject the pay app or deduct the amount until approval is finalized.

Approved vs. Pending Change Orders

This is where many billing problems start. Contractors often know extra work happened, but reviewers usually care about something narrower: is the change order approved for billing yet?

Approved Change Orders

Should be reflected in the contract sum to date
Should be reflected in the approved SOV revision
Can generally be billed as earned work, subject to contract rules
Should match signed values and documentation exactly

Pending Change Orders

May be discussed internally, but not yet billable
Often trigger rejections when included in the pay app too early
Can create contract sum mismatches and reviewer distrust
Should be tracked carefully, but usually kept out of approved billing totals

If your team needs a broader billing framework around this, see construction progress billing and construction payment applications.

What Changes When a Change Order Is Approved?

In an AIA-style workflow, an approved change order affects billing in a few specific places:

Contract Sum to Date increases or decreases (base contract plus or minus approved COs)
Your Schedule of Values (SOV) must still total to the updated contract amount
Your G703-style continuation totals must tie to the SOV
Your G702-style summary totals must tie to the G703 totals
Your retainage treatment must stay consistent unless the contract says otherwise

If you only remember one thing…

AIA-style billing is a chain: Approved Contract + Approved COs → SOV → G703 totals → G702 totals. If one link is off, the reviewer usually finds it fast.

Worked Example: One Approved Change Order

Say your original contract is $250,000. You then receive an approved change order for $18,000 for added electrical scope.

Original Contract Sum	$250,000
Approved Change Order	+$18,000
Contract Sum to Date	$268,000

Now your billing package needs to reflect that same story everywhere:

The G702 contract sum to date should reflect $268,000
Your SOV total should also reflect $268,000
The new CO work should appear as approved scope in the continuation/SOV structure
Any earned amount for that CO work should be billed consistently with retainage and prior totals

If one page says $268,000 and another still effectively says $250,000, the reviewer has a reason to stop and question the entire submission.

Where Change Orders Show Up on G702/G703

Exact field names vary by template, but the logic is consistent: change orders affect the contract amount and the SOV. That is why CO mistakes commonly create “totals don’t match” rejections.

G702-Style Summary

Original Contract Sum for the base contract
Net Change by Change Orders for approved CO totals
Contract Sum to Date = base contract plus approved COs
The rest of the application rolls from the continuation totals

See also: G702 instructions and filled-out example.

G703-Style Continuation / SOV

COs often appear as new line items or as approved adjustments to existing lines
Line item values must match the approved SOV revision
Progress billing continues cumulatively by line item
To-date totals should still roll cleanly from the prior approved period

See: G703 instructions and SOV template guide.

Tip: If your reviewer wants CO traceability, label CO lines clearly, such as “CO-003: Additional Demo.” It reduces back-and-forth and keeps approvals moving.

Two Common Ways to Handle COs in the SOV

Different jobs enforce different standards. The “right” method is whatever your approved SOV and contract require, but these are the two patterns you will see most often:

Method A: Add New CO Line Items

Add one or more new SOV lines for each approved change order, or for each major CO scope bucket.

Usually easiest for reviewers to audit
Keeps base scope separate from added scope
Works well when the CO does not fit neatly into an existing line item

Method B: Adjust Existing Line Values

Modify scheduled values on existing line items, but only if the revised SOV structure is approved.

Can work when the CO closely aligns with an existing scope bucket
Requires strong documentation and consistency
Can create questions if reviewers cannot tell why values changed

What not to do

Do not hide CO dollars by shifting values between unrelated lines
Do not change prior approved period values just to make current totals work
Do not apply retainage to CO work differently unless the contract explicitly requires it
Do not bill pending COs as though they are approved

How Retainage and Progress Billing Fit In

Change orders do not live in isolation. They become part of your progress billing workflow. Once approved, they affect line-item billing, cumulative totals, and often retainage.

If retainage applies to base contract work, it often applies to approved CO work too
If you bill an approved CO this period, it should be reflected in the same cumulative logic as the rest of the job
If the CO changes the contract sum but not the SOV or rollforward math, the package becomes inconsistent

Monthly Checklist for Billing Approved Change Orders

1) Confirm approval

Make sure the CO is actually executed and the signed amount is final.

2) Update contract + SOV

Reflect the approved CO in the contract sum and in the approved SOV structure.

3) Bill earned work correctly

Only bill the portion of approved CO work actually earned this period, with proper retainage treatment.

4) Reconcile totals

Verify G702, G703, SOV totals, and backup all tell the same story before submission.

The CO Mistakes That Get Pay Apps Rejected

Mismatch problems

G702 contract sum includes COs, but SOV total does not
SOV includes COs, but G702 “Net Change by Change Orders” is wrong
CO values do not match signed amounts
G702 totals do not tie to G703 totals

Process problems

Billing pending COs without written approval
Missing CO backup or poor traceability
Line renumbering or scope drift between periods
Retainage applied inconsistently across CO work

Use the rejection checklist Avoid pay app rejections Generate a pay app in PayAppPro

Change Orders + QuickBooks: Keep the Story Straight

Many contractors submit pay apps to the GC, owner, architect, or lender, then record the billing in accounting. If QuickBooks is part of your workflow, the goal is simple: keep the same story consistent across your contract value, CO totals, and what was billed this period.

Practical advice: Do not let your pay app show one CO total while accounting shows another. That mismatch is how payment delays and internal confusion start.

FAQ: Billing Change Orders on G702/G703

Do change orders change the G702 contract sum?

Yes. In an AIA-style workflow, approved change orders increase or decrease the Contract Sum to Date. If the contract sum changes, your SOV totals and your G702/G703 rollups must still tie exactly.

Should change orders be separate line items on the Schedule of Values?

Often, yes—especially when the GC, owner, or lender expects traceability by CO number. The key is consistency: use the approved SOV structure and don’t move dollars between categories without approval.

Can I bill a pending change order?

Usually no. Many reviewers only allow billing for approved (executed) change orders. If you bill a pending CO, expect a rejection or a deduction until approval is finalized.

Why do pay apps get rejected when change orders are involved?

Common reasons are that the G702 contract sum does not include approved change orders, the SOV does not match the approved revision, CO values do not match the signed amount, or totals drift between G702 and G703.

How does retainage apply to change order work?

Typically retainage applies to the value earned, including approved change order work, the same way it applies to base contract work unless the contract says otherwise. Apply retainage consistently using the same method each period.

Build a Pay App with COs in PayAppPro

Keep SOV totals, change orders, and rollups aligned every billing period.