Do's and Don'ts of Billing through Draw Requests

There are many ways to prepare an invoice for a customer; below are a do and don't list of draw request billing.

Do's for the Contract Details screen

  • Use Project Setup. Remember you can import from an Excel spreadsheet and your current estimating software

  • Use Set Up Standard Fixed Billing Items or Set Up Standard Unit Billing Items to create standard billing items. This makes it easier to set the Job Cost phase defaults.

  • Look at the phase file and cost reporting requirements for comparing revenue to costs. The Billing Item Analysis Report is based on the link you create between your draw billing and phase codes.

  • Use the Lookup feature to add an additional description to the line item billing information.

  • Use the Unit price display mask field to create the maximum number of characters or correct the display length of the unit price.

  • Use the Quantity display mask field to set the maximum decimal places for quantity. DOTs are notorious for billing out quantity and price to 3 or 4 decimal places.

Don'ts for the Contract Details screen

  • Don't make changes to the contract details once you have created and billed your first pay application.

Do's for Draw Requests and Data Entry

  • Create the first pay application. This transfers all of your contract details into your billing.

  • Print the Draw Billing Worksheet so the project manager can fill in quantities, percent complete, or billing amounts.

  • Use the Expand option to see dollars calculated on unit price contracts.

  • Select the Summary option to view the front screen of the AIA document.

  • Use the Lookup feature to determined if data contained in the Contract Info window is correct. Do not proceed until the contract information is correct.

  • On the Summary Billing Entry screen, confirm your retention or override the amount.

  • Select the Yes checkbox to create the next pay application number when updating a draw request. Create the next application until all change orders and retention amounts are 100% billed.

Don'ts for Draw Requests and Data Entry

  • If the Previous Application Quantity or Amounts are incorrect, stop. The previous application information needs to be correct before you proceed. You will need to reverse the previous application and update it once more with the Next checkbox selected.

Do's for Change Requests and Change Orders

  • Set up a logical code structure for change Request Status and Change Order Status codes using your change request procedural progression as a guideline.

  • Enter the Contractor Pricing information for any changes to job estimates.

  • Have your subcontractors set up in your Project Management Organization Directory. if the directory is not set up and you are using Project Management, print the Subcontract File Listing to reference the vendor code and subcontract number.

  • Use the Create Sub Co feature , which allows you to assign a subcontract change order number to your owner change request proposal.

  • Click the Financials button to review the impact of the change request or change order.

  • Use the Document Imaging option to attach specifications, field work orders, or correspondence related to this change.

  • Use the Print CR Proposal Form and Change Request Proposal Letter to document your contract changes.

  • Print the Change Request Pricing/Profit Report before changing the status of a change request. The project manager then has the opportunity to review contract value changes and increases/decreases to estimated and projected costs.

  • Use the Create CO feature when you have one change request on a change order. This is a quick and efficient way to create the owner change order.

  • Use the Reverse Change Order feature to remove change orders from draw requests when you are required to reverse applications for corrections.

  • Use the Expand option in the Subcontract Change Order Log to track the dates on which the subcontract change order was entered, proposed, due, and signed.

  • Use the Selections options in all of the change request, change order, and subcontract change order print options. These selections allow you to manage and track outstanding items.

Don'ts for Change Requests and Change Orders

  • Don't set up codes you do not need. If your revenue recognition policy requires an owner change order before amounts can be presented on a draw request, do not set up a change request status code associated with action item 1, Recognize revenue and cost revisions, billing allowed.

  • Do not associate a change request with an owner change order if there is not a signed change order or an agreement on the line items and value. This step is irrevocable. once you associate a change request with a change order, you can make no further changes. If more changes are necessary, you must enter them on a new change request.

  • Don't use the Create CO feature if you have more than one change request included on the owner change order. You have no opportunity to verify the total amount before the owner's change order is created.