Ahh, good ol’ pay apps. After manually comparing the G702 and G703 there’s a good chance the figures don’t match up or the retainage for the current period is missing. You might also need to manually reconcile the Subcontractor pay apps to the General Contractor pay apps. Many developers avoid reconciling this data because it’s a difficult or tedious process. Ultimately the bank finds issues and you have to redo things or waste time on unnecessary back and forth communication with your lender. If you’re already doing the work to reconcile pay apps, technology can make it easier.
Retainage is another area where issues commonly occur and calculating it can get dicey at the end of a project when all parties don’t agree. If you leverage technology to track retainage appropriately, you won’t have to go back and figure it out, it’s always there for you.
This is another great opportunity to boost efficiency with technology. Solutions exist today that read the G702 and G703 documents, compare values to the budget and calculate both the current period retainage and any retainage releases. Best of all, they even provide an easy view of Subcontractor pay apps reconciled against the GC pay apps.
Why is Rabbet building integrations with every major accounting software? Development management and accounting are distinct and important activities for any real estate developer. Like drywall and paint, both are... Read More
To finance slow payments, the estimated overhead included in subcontractors’ bids is 2.75% and 5.81% for general contractors. This year’s report uncovered that slow payments to subcontractors and general contractors will create $136B in additional costs for the US Construction Industry in 2021.
