change orders AIA-style billing approval matters

Approved vs Pending Change Orders in AIA Billing

This is one of the biggest pay app mistakes in construction billing: treating a pending change order like an approved one. The work may be real, the field may be moving, and everyone may “know it’s coming” — but that still does not mean it belongs in the formal pay app.

Quick answer:

In most projects, approved change orders are the ones that belong in your formal AIA-style pay application. They change the contract sum, affect the Schedule of Values, and can usually be billed. Pending change orders are usually tracked separately until they are signed or formally authorized.

PayAppPro outputs are AIA-style only and are not licensed AIA documents. AIA®, G702®, and G703® are registered trademarks of the American Institute of Architects.
Create a Pay App for $7.99 How to Add Change Orders to G702/G703

Why this distinction matters so much

A formal pay application is not just a request for money. It is a statement that your contract amount, progress to date, retainage, and current request all line up. That is why change orders create so much friction.

  • The field team may see the work as real and billable.
  • The GC may be “fine with it” verbally.
  • The owner may still not have approved the number.
  • Accounting may not have the contract sum updated yet.

That gap between real work performed and approved contract value is where pay apps get rejected.

Need the bigger workflow too?

This page explains the approval distinction. Use the pages below if you need the actual form workflow, the rejection checklist, or the broader payment application framework.

How to Fill Out G702/G703 Rejection Checklist
Contract + SOV side
What is a Schedule of Values (SOV)?
How to add change orders to G702/G703
Summary / form side
G702 instructions
G703 instructions
Pain / mistake side
Common errors to avoid
Construction payment application guide

What is an approved change order?

An approved change order is a change that has been signed or formally authorized according to the contract process.

  • The value is defined
  • The scope is defined
  • The contract sum can be updated
  • The SOV can be updated to match
  • The amount is usually billable in the formal pay app

What is a pending change order?

A pending change order is work that may be priced, discussed, and even underway, but is not yet fully approved.

  • The final number may not be agreed
  • The scope may still be under discussion
  • The contract sum may not yet be updated
  • The SOV usually should not be treated as final
  • Billing it as approved usually creates rejection risk

What usually belongs in the formal pay app

Item Approved CO Pending CO
Included in contract sum to date Usually yes Usually no
Included in formal SOV values Usually yes Usually no
Billed on formal G702/G703 pay app Usually yes Usually no
Needs backup / paper trail Yes Yes
May require separate tracking outside pay app Sometimes Usually yes

The safest default is simple: approved COs go in the formal pay app; pending COs stay separate until approval.

Where approved change orders usually show up

On the G702 summary

Approved change orders affect the contract sum to date. That means the top-level contract math should reflect them.

  • Original contract sum
  • Net change by change orders
  • Updated contract sum to date

On the G703 continuation sheet / SOV

Approved change orders also need to be reflected in the continuation detail, which usually means:

  • adding a dedicated CO line item, or
  • adjusting an existing SOV line when that is the approved project convention.
Related: How to Add Change Orders to G702/G703 · G702 vs G703

Why pending change orders cause so many problems

Pending change orders are messy because they live in the gray zone between operations and contract administration.

  • The work may already be happening
  • The cost may be mostly understood
  • The PM may assume it will be approved
  • The contract sum may still not be formally updated

Once you put a pending CO into a formal pay app as if it were approved, you create a mismatch:

  • The contract sum may be wrong
  • The SOV may be overstated
  • Retainage may be wrong
  • The owner or GC may reject or reduce the request
Simple rule: don’t force certainty into the pay app when the paperwork is still uncertain.

A practical workflow that keeps you out of trouble

1) Track all COs

Keep a running list of all change requests, pending or approved.

2) Separate status clearly

Make sure pending and approved COs are never mixed together.

3) Update contract + SOV only when approved

Approved COs change the formal billing structure. Pending COs do not.

4) Bill from the approved structure

Once approved, bill the work using the updated G702/G703 structure.

Common mistakes with approved vs pending COs

  • Adding pending COs into the contract sum “just for now”
  • Updating SOV totals before the CO is formally approved
  • Using one value internally and another value on the pay app
  • Applying retainage to CO work differently than the contract requires
  • Failing to match the GC’s official CO log
Also review: Common G702/G703 Errors to Avoid · Rejection Checklist

How PayAppPro helps keep CO status clean

  • Helps keep approved contract values aligned with the SOV
  • Reduces the temptation to bill from half-updated spreadsheets
  • Keeps G702 summary math tied to G703 detail
  • Makes it easier to bill approved COs consistently across periods
Build Pay Apps the Right Way

Keep approved totals, change orders, and summary math aligned automatically.

FAQ: Approved vs Pending Change Orders

Usually, no. Most reviewers expect only approved change orders to be included in the contract sum and Schedule of Values used for a formal pay application. Billing pending change orders is a common reason pay apps get rejected or reduced.

An approved change order has been signed or formally authorized and can usually be added to the contract sum and Schedule of Values. A pending change order is still under review, disputed, or not fully authorized, so it usually should not be billed as though it is part of the approved contract.

Approved change orders typically affect the contract sum on the G702 and the Schedule of Values or continuation detail on the G703. The key is that both forms must tell the same story and tie out to the approved contract value.

Pending change orders create confusion because the work may be real in the field, but the contract value may not yet be updated. If the contract sum, SOV, retainage, and billed amount are not aligned, reviewers often reject the package.

The safest default workflow is to bill approved change orders in the formal pay app, keep pending change orders tracked separately, and update the contract sum and SOV only when the change order is formally approved.