Construction Pay Apps Without Overpayment: Verified Extraction for Progress Billing and Lien Waivers

Construction payment workflows are a perfect storm:

• huge dollar values,
• lots of parties,
• tight timelines,
• and documents that look standard until they aren’t.

Teams process:

• pay applications (often with schedules of values)
• change orders
• certified payroll (sometimes)
• conditional and unconditional lien waivers
• supporting invoices and releases (varies)

The work is repetitive, but the risk is not:

• overpayment
• paying without proper waiver coverage
• missing retainage rules
• misapplied change orders
• disputes that turn into “who said what was approved?”

Evidence-backed extraction makes progress billing safer and faster because every number and waiver statement can be traced to the exact line that supports it.

Where the money leaks (and what to extract)

Pay application totals (high impact)

• contract sum to date
• approved change orders (add/deduct)
• total completed and stored to date
• retainage rate and retainage amount
• previous payments
• amount due this period
• billing period dates / application number

Schedule of values (SOV) line items

• trade line descriptions
• scheduled value
• work completed previous / this period
• materials stored
• percent complete

Lien waivers (risk control)

• waiver type (conditional vs unconditional)
• through date / amount covered
• project and parties (owner/GC/sub)
• signer name/title
• carve-outs/exceptions language (if any)

Citations matter because “retainage amount” or “waiver through date” is not something you want to guess.

The workflow: approve the clean ones, route the exceptions

1) Ingest the payment packet

Treat each payment as a packet:

• pay app + SOV
• supporting backup
• lien waiver(s)
• change orders (or references)

2) Extract canonical fields + citations

You want:

• structured numbers for automation
• evidence for verification and disputes

3) Run consistency checks

High-value checks include:

• pay app “amount due” equals SOV rollup
• retainage rate consistent with contract terms
• change order totals match approved CO log
• waiver amount ≥ amount being paid (where appropriate)
• waiver through date aligns with billing period

4) Exception view with side-by-side proof

When something fails, show:

• extracted value + highlight in pay app
• rollup value + highlight in SOV
• waiver language + highlight in waiver

The goal is to turn a 30-minute investigation into a 2-minute decision.

Schema sketch: progress payment + waivers

{
  "schema": {
    "project_name": { "type": "string" },
    "owner_name": { "type": "string" },
    "general_contractor_name": { "type": "string" },
    "subcontractor_name": { "type": "string" },

    "pay_app_number": { "type": "string" },
    "billing_period_start": { "type": "date" },
    "billing_period_end": { "type": "date" },

    "original_contract_sum": { "type": "number" },
    "approved_change_orders_net": { "type": "number" },
    "contract_sum_to_date": { "type": "number" },

    "total_completed_and_stored_to_date": { "type": "number" },
    "retainage_rate_pct": { "type": "number" },
    "retainage_amount": { "type": "number" },

    "previous_payments": { "type": "number" },
    "amount_due_this_period": { "type": "number" },

    "sov_lines": {
      "type": "array",
      "items": {
        "type": "object",
        "properties": {
          "line_description": { "type": "string" },
          "scheduled_value": { "type": "number" },
          "work_completed_this_period": { "type": "number" },
          "materials_presently_stored": { "type": "number" },
          "total_completed_and_stored": { "type": "number" }
        }
      }
    },

    "lien_waiver_type": { "type": "string", "description": "conditional or unconditional" },
    "lien_waiver_through_date": { "type": "date" },
    "lien_waiver_amount": { "type": "number" },
    "lien_waiver_exceptions_text": { "type": "string" }
  },
  "options": { "confidence_threshold": 0.85 }
}

KPIs that move first

• cycle time from pay app receipt → approval
• % packets auto-cleared (no exceptions)
• median time to resolve a mismatch
• duplicate/overpayment prevention rate
• dispute resolution time (“show me the backup” time)

Construction payments don’t get safer by adding more spreadsheets. They get safer by making every number and waiver statement verifiable.

Citations turn progress billing into a fast, defensible workflow.