Schedule of values: what it is and how to build one

On most commercial jobs, you don’t get paid in one lump sum at the end. You bill every month for the work done so far. The schedule of values is the document that makes that possible, and a well-built one is the difference between pay applications that go through and ones that come back.

This guide explains what a schedule of values is, how it’s used in progress billing, and how to build one from your estimate.

What is a schedule of values?

A schedule of values (SOV) is an itemized list that breaks the total contract sum into parts of the work, each with its own dollar value. Add up every line and you get the contract sum, exactly.

Once it’s approved, the SOV becomes the basis for every progress payment. Each month, you report how much of each line is complete, and you’re paid for that share.

Under the standard AIA general conditions (A201), the contractor submits the schedule of values to the architect before the first application for payment, and it’s used as the basis for reviewing applications unless the architect objects. Other contract forms have similar requirements; check yours.

How the SOV fits into a pay application

On AIA-based contracts, a payment application has two parts:

• G702, Application and Certificate for Payment: the summary page, with the totals, retainage and amount due
• G703, Continuation Sheet: the line-by-line detail. This is where the schedule of values lives.

The G703 has a standard set of columns:

Columns A, B and C come straight from your schedule of values and don’t change unless a change order adds or adjusts lines.

A worked example

Here’s a simplified SOV for a $480,000 tenant improvement (example numbers only):

Now say it’s the third month. For line 4, metal framing and drywall:

• Previous applications (D): $30,000
• This period (E): $25,800
• Stored materials (F): $0
• Total to date (G): $55,800, which is 65% complete ($55,800 ÷ $86,000)
• Balance to finish (H): $30,200
• Retainage at 10% (I): $5,580

Every line is worked out the same way, and the totals carry to the G702 summary.

How to build a schedule of values

1. Start from your estimate

The best SOV comes straight from a detailed estimate, which itself comes from an accurate quantity takeoff. If your estimate is organized by CSI division, you already have a natural set of line items.

2. Choose the right level of detail

Too few lines and every billing becomes an argument about percentages. Too many and each pay app takes a day to prepare. A practical rule:

• Separate each major trade or subcontract
• Split large lines by phase, floor or area when work happens in stages (for example, “Drywall, level 1” and “Drywall, level 2”)
• Separate material and labor on lines where expensive materials are delivered well before installation, so stored materials can be billed cleanly

3. Decide where overhead, profit and general conditions go

Some owners want general conditions, insurance, bonds and fee as separate lines; others want them spread across the work lines. Ask before you build it, because the contract or the owner’s lender may require a specific format.

4. Match it to the schedule

Line items should line up with how the work is actually sequenced. If the project schedule has the building enclosed in month four, the SOV should let you bill for the envelope in month four.

5. Check the math

The scheduled values must add up to the contract sum to the dollar. Change orders are added as new lines, or as revisions with their own numbers, so the original SOV stays traceable.

Mistakes that get pay apps rejected

• Front-loading: inflating the value of early work (mobilization, demolition, sitework) to collect cash sooner. Owners and lenders look for it, and it damages trust for the rest of the job.
• Lines that don’t match the contract: values that don’t add up, or scopes listed that aren’t in the contract.
• Billing ahead of the work: claiming percentages the site doesn’t support. Inspectors and owner’s reps walk the job.
• Stored materials without backup: most owners want invoices, proof of insurance and sometimes photos or a bill of sale before paying for materials not yet installed.
• Lines too broad to measure: “Interior finishes, $240,000” is hard to agree a percentage on. Smaller, clearly defined lines get paid faster.

Frequently asked questions

Who prepares the schedule of values?

The general contractor prepares the SOV for the owner. Subcontractors usually prepare their own SOV for the general contractor, often in the same format, so their billings roll up into the GC’s pay application.

Is the schedule of values the same as the project schedule?

No. The project schedule is about time: what happens when. The schedule of values is about money: what each part of the work is worth. A good SOV is built to match the project schedule.

What is retainage?

Retainage is a percentage of each payment the owner holds back until the work is complete, as security. It’s commonly 5% to 10%, but the contract and, on public jobs, state law set the actual rate and when it’s released.

Build your SOV from real quantities

A schedule of values is only as reliable as the estimate behind it. We prepare project schedules and schedules of values cross-referenced to our takeoffs, so every line traces back to measured quantities.