Our project teams complete their own pay apps to our client and there is a debate between some project managers and our systems manager regarding how to properly complete the continuation page of a Pay App (essentially the AIA G703). 

The PM feels the amount in Stored Materials (col. F) should automatically move to Completed & Stored to Date (col. G).  The SM feels if an amount is taken out of Stored Materials (col. F) it should automatically move to Work in Place This Period (col. E).  I've tried to convince the PM if materials are no longer stored they are assumed to be in place and would be included in column E in the period they are removed from column F.  He insists this is not how it's done.

I'm looking for feedback confirming my position or refuting it if I'm wrong.

Thank you.

Hi Christine,

 Technically speaking, I believe you are correct.  If you look at the back of the G703 form where the instructions are, you will see the following:

B.

Column F: Enter here the value of material Presently Stored for which payment is sought.  The total of the column must be recalculated at the end of each pay period.  This value covers both materials newly stored for which payment is sought and materials previously stored which are not yet incorporated into the Project.  Mere payment by the Owner for stored materials does not result in a deduction from this column.  Only as materials are incorporated into the Project is their value deducted from this column and incorporated into column E (Work Complete - This period).

However as others have pointed out, it all comes down to your customer's preference - whether that's the architect or the owner...

I've had subcontractors argue with me about this, even going so far as to call the American Institue of Architects!  Strangely enough,  then answer they claimed to have received did not match the instructions on the form.  My answer to her:  this is our policy.

I've also had subs tell me their software forces stored materials into the previous work completed column.  To those people I've suggested the use of correction tape to fix it themselves.  Ultimately, I've often corrected it on my end as it's more efficient.

Here's a question:  if stored materials are moved into the previous work completed before being installed, how do you track insurance coverage for those materials being stored off site?

Christine

In my experience, it really doesn't matter what the two of you 'decide'.  If this is going through an architect, his opinion will be the deciding factor.  I have had architects argue strongly both ways.  Conceptually, it makes most sense to roll stored materials to work in place in the following period, then to previously completed.  But I have found this is harder to deal with from an accounting perspective, as the 'previous completed' number doesn't always allow the current invoice to tie out to the current work in place.  Materials that are stored for several months in a row can become a pain to deal with.

 It certainly is easier to deal with if you allow 'stored' to roll to 'previous' in the following month.  You will find some architects that will fight you on this.  I always defaulted to the easier route, but left myself the flexibility to it the other way just in case.

Sorry I can't provide any 'official' rule on this...

 David

You're both right.  It depends on your customer's policy on the treatment of stored materials on the G703.  Some customers will want to see stored materials in that column until installed (even when previously billed).  Others want to see it moved from stored materials after it is billed.

 Some accounting systems have the option to handle it either way, others assume that it's removed from stored materials after the stored materials are billed. 

I hope this helps.  Feel free to contact me directly if you have any questions.