What the G703 columns mean
| Column | Meaning | Common error |
|---|---|---|
| C — Scheduled value | The line’s share of the contract sum | Lines that do not sum to the contract sum after change orders |
| D — From previous application | Work completed on prior applications (prior D + prior E) | Prior stored materials folded in here, then billed again in F |
| E — This period | Work completed this period | Installed material counted here while still sitting in F |
| F — Materials presently stored | Delivered, not yet installed, not in D or E | A running total that never comes down as material is installed |
| G — Total completed and stored to date | D + E + F | Exceeding the scheduled value |
| H — Balance to finish | C − G | Negative balances nobody notices |
| I — Retainage | Retainage on G, which may use a different rate for stored materials | One rate applied to everything when the contract says otherwise |
The relationship to remember: as material is installed, it moves out of Column F and into Column E. The total in G should not change because of the move; only its composition does. If G jumps when material is installed, something was counted twice.
What owners usually require
- Contract language that permits billing stored materials at all; many contracts limit it to materials stored on site
- Off-site storage only in a bonded warehouse, with the owner’s approval and often a right to inspect
- Paid invoices or bills of sale for the stored materials, so title can pass to the owner on payment
- Insurance covering the stored materials, naming the owner where the contract requires
- A stored materials log or schedule per line listing what was received, what was installed, and what remains
- Retainage on stored materials, sometimes at a higher rate than on work in place, or full retainage until installation
The double-billing trap
Application 3 bills $40,000 of stored switchgear in Column F. In application 4 the switchgear is installed. The correct application 4 shows the $40,000 in Column E (this period) and zero in Column F for that line, with D carrying forward only prior work in place. The wrong application 4 carries prior D plus the prior stored $40,000 into D, and the biller, seeing the switchgear now installed, enters another $40,000 in E. Total completed is now $80,000 for $40,000 of gear.
The defense is mechanical: the new application should seed Column D from prior work only, and seed Column F from the prior stored balance so the biller adjusts it down as material is installed. A spreadsheet that copies last month’s G into this month’s D will make the mistake sooner or later.
The accounting
Stored materials are a billing concept. Under the cost-to-cost method, uninstalled materials that are billed are not yet part of cost to date for percent-complete purposes unless the contract treats them as earned; most contractors exclude uninstalled materials from the percent-complete calculation, recognize revenue equal to their cost with no margin, and treat the billing as part of billed-to-date. The result is that billing stored materials pushes the job toward over-billing on the WIP schedule by about the margin on those lines until the material is installed, which is correct and should be expected, not adjusted away.
- Vendor invoice for the material: job cost (or a materials-in-transit account if your policy excludes it from percent complete until installed)
- Pay application including stored materials: billed-to-date includes Column F; retainage receivable includes retainage on stored materials at its own rate
- Installation: no entry; Column F moves to Column E on the next application
- WIP schedule: earned revenue follows cost-based percent complete; billed includes stored materials; the difference shows as over-billing until installation
Subcontractor pay applications with stored materials
The same rules apply downstream. A subcontractor billing stored materials must meet the same documentation standard the owner holds you to, because you will be passing those materials up the chain on your own application. Check that the subcontractor’s stored line is on your schedule of values, that the material is on site or in an approved location, that the invoice is attached, and that retainage on the sub’s stored materials is withheld at the rate in the subcontract.
How Forge ERP handles stored materials
Forge’s AIA pay applications carry a materials-presently-stored amount on each schedule-of-values line, with retainage on stored materials calculated at its own rate from the schedule of values. When a new application is created, prior work in place seeds the previous-application column and the prior stored balance seeds the stored-materials column, where the biller adjusts it down as material is installed, so stored materials cannot be billed twice. Line amounts must be nonnegative and cannot exceed scheduled value, the printed G702 balance to finish includes retainage as its label states, and an application can be submitted or certified only when the schedule of values reconciles to the contract sum.
Certifying an application accrues only the incremental retainage since the prior certificate through a balanced journal, and retainage cannot be released beyond the withheld balance: pending releases reserve it and approval re-checks it. On the payable side, subcontractor pay applications are tracked against the subcontract with retainage withheld and payment eligibility checked before release.
Forge ERP covers projects, purchasing, accounts payable, billing and receivables, job cost and WIP, reporting and close. Payroll runs in your payroll provider and lands in Forge as job-costed labor with burden. Forge is in beta with a 14-day free trial.
Frequently asked
- Can I bill for materials stored off site?
- Only if the contract allows it, and usually only in a bonded warehouse with the owner’s approval, insurance and documentation that title will pass on payment. Many contracts limit stored-material billing to materials on the site.
- Is retainage withheld on stored materials?
- Usually, and sometimes at a different rate than on work in place. The schedule of values or contract sets the rate. Some owners withhold full retainage on stored materials until they are installed.
- Do stored materials count toward percent complete?
- Under cost-to-cost, most contractors exclude uninstalled materials from the percent-complete calculation because no effort has been expended on them, recognizing revenue equal to their cost with no margin. The billing still counts in billed-to-date, so the WIP schedule leans toward over-billing by about the margin on those lines until installation. That is the expected result, not an error.