How does stored materials work in Contracts and Billing?

There are two ways to process stored materials. Each method requires a different setting on the contract in the Contracts application, which determines whether or not stored materials billed are added to Previous Work Completed in Billing. Each method requires different data entry in Contract-Based Invoices in Billing. Use option A if stored materials are considered stored and complete when billed; use option B if stored and materials are considered stored, but not complete, when billed.

Please note: The stored materials setting applies when the Contract is created, and does not retroactively affect existing Contracts.

Option A:
Stored materials are considered stored and complete (used or incorporated into the project) when billed, and they are added to Previous Work Completed.

1. Setting up: In the Contracts application, select the Add stored materials to previous work completed check box on the Contract (Billing tab).
2. Entry: In Tasks , Contract-Based Invoices in the Materials Presently Stored column, enter the stored materials amount to bill this period. The stored materials amount accumulates in the Previous Work Completed amount, and replaces the Previously Stored Materials amount on the next worksheet that you enter for that contract item.

Option B:
Stored materials are considered stored, but not complete (not used or incorporated into the project) when billed, and they are not added to Previous Work Completed. This is the method outlined on the instruction sheet for AIA Document G703.

1. Setting up: In the Contracts application, do not select the Add stored materials to previous work completed check box on the contract (Billing tab).
2. Entry: In Tasks , Contract-Based Invoices in the Materials Presently Stored column, enter any new stored materials to bill this period that are not complete, plus any previously billed stored materials that are not complete. When previously billed stored materials are complete, enter both the completed stored materials amount plus all other work completed in the Work Completed this Period column, and reduce the amount in the Materials Presently Stored column.

Examples:

The following examples show the difference between how the two methods handle the same situations.

The contract item is entered with a contract amount of $7,500 ($6,500 is labor and $1,000 is materials):

• Draw 1: The general contractor completes $3,000 of labor and stores $1,000 of materials.
• Draw 2: An additional $2,250 of labor is completed with no change to the materials.
• Draw 3: $250 of the $1,000 of stored materials is used on the job. An additional $400 of labor is completed.
• Draw 4: Another $600 of labor is completed.
• Draw 5: A subcontractor finishes installation and uses the remaining $750 of stored materials.
• Draw 6: A change order is entered to cover an additional $200 of materials delivered to the site.
• Draw 7: The general contractor completes the last $250 of labor and uses the last $200 of stored materials.

1. (Option A) Stored materials are considered stored and complete when billed, and they are added to Previous Work Completed

2. (Option B) Stored materials are considered stored, but not complete when billed, and they are not added to Previous Work Completed