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Progress payment schedule for contractors: a free example tied to milestones

Cash flow on a job is decided the day the contract is signed. If payments are tied to dates or to “percent complete” guesses, you end up arguing about how done the job is. Tie each draw to a milestone the customer can see, and the conversation gets simple: the inspection passed, the invoice goes out. Here is an example schedule for a mid-size remodel, plus the rules that keep it working.

Example: six-draw schedule for a remodel

This is an example, not a standard. Small jobs often use two or three draws; long jobs may bill monthly against a schedule of values. Change the percentages to match where your costs actually land.

Five rules for a payment schedule that gets paid

1. Check your state’s deposit rules first. Some states cap how much you can collect up front on a home-improvement contract, or require specific contract wording. Look it up with your licensing board before you set the first line.
2. Front-load to match your costs, not your hopes. If materials are half the job, the early draws should roughly cover them so you are never financing the customer’s project.
3. Use milestones anyone can verify. “Rough inspection passed” beats “50% complete.” Inspections, deliveries and finished stages are hard to dispute.
4. Hold back a small final payment, not a big one. A 5–10% final draw gives the customer a reason to trust you without leaving your profit hostage to the punch list.
5. Say what happens when a payment is late. State that work may pause after a stated number of days past due, and that change orders are billed with the next draw.

This is a general example, not legal or financial advice. Deposit limits, payment terms, retainage and lien rules vary by state; check your state’s licensing board and have an attorney review your contract and forms.

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