A pay application (pay app) is the formal request for payment a contractor submits each billing period — typically monthly — for the work put in place to date. It bills against the Schedule of Values, showing the percent complete and dollars earned per line item, less retainage.
Reviewing pay apps is a core cost-control task. The trap is front-loading: a sub billing 80% on a line that's only 55% installed. Catching that (a "pencil draw" adjustment) protects the owner and keeps the money aligned with actual progress. On the owner side, the GC's pay app is how the whole job gets paid.