Schedule of Values
Schedule of Values (SOV) in construction: what it is, how to build one that protects your cash flow, and how to use it for AIA billing and draw requests.
Calculation Formula
Total Contract Sum = Σ (All SOV Line Items) Real Contractor Example
A $150,000 basement finish is broken down into: Demo ($5k), Framing ($15k), Electrical ($12k), Plumbing ($18k), etc., for progress billing.
What Is a Schedule of Values and Why Does It Matter
A Schedule of Values (SOV) is a detailed table that breaks a construction contract into individual line items — each representing a defined scope of work with a corresponding dollar value. The sum of all line items equals the total contract amount.
The SOV serves as the financial backbone of progress billing. When you submit a draw request (Application for Payment), you report the percentage of each SOV line item that is complete. The owner reviews, approves, and releases payment for the approved completed percentage of each line.
On commercial projects, the SOV is usually structured to align with the AIA G703 Continuation Sheet format. On residential projects, it can be simpler — but the principle is the same: break the job into billable phases, assign values to each, and bill based on completion.
A well-structured SOV protects your cash flow by ensuring you get paid as costs are incurred, not as finished work becomes visible. A poorly structured SOV — or no SOV at all — is one of the most common causes of cash flow crises on construction projects.
How to Build an SOV That Protects Your Cash Flow
Step 1: Start with your estimate. Every major cost category in your estimate should have a corresponding SOV line item. Labor, materials, subcontractors, and equipment should each be represented — not pooled into a single line.
Step 2: Align values with real cost timing. Early-phase work (mobilization, demolition, site prep, foundation) typically incurs more cost than the average project percentage suggests. Assign values that reflect when you actually spend money, not just when work becomes visible to the owner.
Step 3: Separate stored materials. Most standard contracts allow you to bill for materials delivered to the site even before they're installed. Include a stored materials column in your SOV and use it aggressively — this significantly improves early-phase cash flow.
Step 4: Keep line items granular enough to bill meaningfully, but not so granular that tracking completion becomes its own full-time job. For most residential remodeling projects, 8–15 SOV line items is the right level of detail.
Front-Loading Your SOV — What It Is and When to Use It
Front-loading is the practice of assigning higher-than-proportional dollar values to early SOV line items (mobilization, demolition, site prep) so that early draw requests bring in more cash than the work percentage alone would suggest.
Owners and their representatives are aware of front-loading and will push back if it's excessive. But modest front-loading (10–15% on early phases) is widely accepted and effectively mirrors the actual cost curve of most projects, where material procurement and mobilization costs are genuinely front-weighted.
The rule of thumb: front-load to match your actual cost curve, not to extract cash beyond your real expenditures. An SOV that accurately reflects when you spend money is both defensible and effective.
Frequently Asked Questions
Is a Schedule of Values required on residential projects?
Not always required by contract, but highly recommended. Without an SOV, progress billing becomes subjective — the owner decides what 'percent complete' looks like, not a pre-agreed table. An SOV eliminates most progress payment disputes by defining completion criteria for each line item in advance.
What is the difference between an SOV and a Schedule of Values continuation sheet?
The Schedule of Values (AIA G703 format) is the detailed line-item breakdown. The AIA G702 is the summary Application for Payment form. Together, G702 + G703 constitute a complete AIA application for payment — the G703 continuation sheet provides the line-item detail that supports the G702 summary totals.
How does retainage appear on a Schedule of Values?
Each line item on the SOV includes a retainage column. As each line is invoiced, the retained percentage (e.g., 10%) is withheld and tracked cumulatively. The total retainage withheld is shown on the G702 summary and carried forward until substantial completion and release conditions are met.
Put This Into Practice
Knowing the definition is step one. RemodelFin tracks this in real time on every job — no spreadsheets.