AI for Valuation & Payment Applications
Use AI to draft interim valuations, payment applications, and supporting documentation for construction projects.
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4 AI workflows for valuation & payment applications
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How AI helps with valuation & payment applications
AI helps with valuations and payment applications by laying out your measure, variations, materials on site, retention and previous payments as a clear cumulative application, and checking the sums against last month. It can also draft the cover letter, the supporting schedules, a final account summary, and the layout of payment and pay less notices from figures you give it.
It can't measure the work, decide what you're entitled to or tell you when your notices are due. Payment dates and notices are set by the contract, and where the contract doesn't comply with the Construction Act, the Scheme for Construction Contracts fills the gap. A late or missing notice can decide what gets paid, so check your contract and take advice on dates and entitlement.
Start with one application, such as this month's. Use a business account with data controls switched on, not a personal one, and check every total against your own spreadsheet before it goes out.
Where AI helps most
- Interim applications: measured work, variations, materials on site, retention and previous payments set out cumulatively, down to the amount due.
- Month-on-month checks: comparing this application with the last and flagging lines that went backwards, passed 100% or don't add up.
- Payment and pay less notices: the sum considered due and how it was calculated, set out from your figures for you to check.
- Reconciling valuations: the other side's valuation set against your application line by line, showing where they differ.
- Final account summaries: contract sum, adjustments, variations and claims, with agreed and disputed items shown separately.
Where to be careful
- Notices and timings: missing a payment notice or pay less notice can change what's payable. Never rely on AI to work out a deadline. Check your contract and take advice.
- Arithmetic: AI can get sums and percentages wrong while sounding certain. Check every total against your spreadsheet.
- Entitlement: show unagreed variations and claims separately. An inflated application damages trust and comes back to bite at the final account.
- Data: rates, names and account values are confidential. Keep them in a business account with data controls, never a personal one.
Frequently asked questions
- When is a payment notice due?
- The contract sets the due date for each payment and how soon after it the payer must give a payment notice. If the contract doesn't provide an adequate mechanism, the Scheme for Construction Contracts applies instead. Don't rely on a general rule or an AI tool for the date. Check your contract and take advice.
- What is the difference between a payment notice and a pay less notice?
- A payment notice says what the payer considers due at the due date and how it was worked out. A pay less notice says they intend to pay less than the notified sum, with the amount and the basis, and it must be given by a deadline the contract sets before the final date for payment. Without a valid one, the payer generally has to pay the notified sum. Check your contract and take advice.
- What happens if no payment notice is issued?
- The payee's application can often stand as the notified sum, and the payer then has to pay it unless they give a valid pay less notice. The detail depends on how the contract is set up and whether an application was made. Check your contract and take advice.
- What is retention in construction?
- A percentage held back from each payment as security against defects. It's usually released in stages, part at practical completion and the rest at the end of the defects period. The percentage and release points are in the contract, so diary them: retention is easy to forget about.
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