Contracts
How do I create a payment schedule?
Quick answer
Tie payments to completed milestones — such as a deposit, rough-in, and final walkthrough — so you're never funding the job out of pocket. Keep a meaningful final payment so the customer stays engaged through punch-list completion.
Definition
A payment schedule breaks the contract price into installments tied to progress milestones, balancing the contractor's cash flow with the customer's protection.
Step by step
- 1Set a deposit that covers mobilization and early materials.
- 2Add progress payments at clear, verifiable milestones.
- 3Keep a final payment large enough to ensure completion.
- 4Check your state's deposit and draw limits.
Key takeaways
- Never let costs run ahead of payments received.
- Milestones should be objective and easy to verify.
- A real final payment protects both sides.
Related questions
- What is a draw schedule?
- How big should a deposit be?
- How do I write a construction contract?
Frequently asked questions
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