Payment schedules for construction that keep cash flowing, set client expectations, and reduce disputes. Practical steps and examples contractors can use.
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If you've ever finished a big chunk of work and then chased payment for weeks, you know the pain. Solid payment schedules fix that. A payment schedule sets out who pays, how much, and when—tied to clear milestones—so you protect cash flow and avoid messy arguments. In this guide, we’ll walk through how to design, present, and enforce payment schedules that clients accept and that get you paid on time. We’ll use real job examples, highlight common mistakes, and show simple ways to implement schedules in your proposals and invoices without adding admin.
Quick Answer: A construction payment schedule is a staged plan that ties payments to specific milestones (e.g., deposit, materials on site, first fix complete), with short terms (7–14 days), clear sign-off points, and late payment steps. The best payment schedules are specific, visible, and agreed in writing before work starts.
Materials usually need paying before installation. Labour is weekly or bi-weekly. Utilities, skips, plant, and fuel never wait. A job with a slow first payment can put you out of pocket in the first 10–14 days. Payment schedules move cash into the same rhythm as your costs.
Most disputes start with vague wording like “50 percent at halfway”. Halfway to you is not halfway to a homeowner. Clear milestones—“roof structure installed and inspected” or “first fix complete” —make payments easy to understand and approve.
Across regions, contracts commonly require payment terms and a process for notices or disputes. Keep it simple: agreed milestones, due dates, and what happens if a payment is late. Always align with your local regulations and standard forms where you work.
Payment schedules only work if the scope and inclusions are crisp. List the work, the exclusions, and what counts as a milestone. Attach drawings or photos for clarity. Many contractors struggle with “sliding scope”—get it fixed upfront and your schedule stays on track.
A reasonable deposit (commonly 10–30 percent depending on job size and materials) covers early costs like design time, ordering, and booking labour. For small jobs under two days, some contractors skip the deposit and use payment on completion—use judgement based on risk.
Avoid “percent complete”. Use milestones a client can see and sign:
Three to six milestones is the sweet spot. Fewer often starves cash flow; more creates admin.
Set 7–14 day terms from invoice date. Build in a 24–48 hour client sign-off window after each milestone. Short, predictable terms reduce the “end of month” pile-up.
State the process before work starts: reminder at day 3, pause notice at day 7, demobilisation at day 14 until cleared. If allowed in your region, mention a modest admin fee or interest for late payments. Always follow your contract and local law.
For residential work, retention is mixed: some use 2–5 percent held until snagging is completed; others swap retention for a short 5–10 day final payment term. If you use retention, cap it and set a clear release date tied to a snag list sign-off.
When scope changes, issue a mini-proposal with its own milestone and price. Don’t let variations delay core stage payments. Many contractors report this simple separation halves the back-and-forth.
Clients accept what they see clearly. Put the payment schedule on page one or two, not buried at the end. Use plain language, photos, and bullet points.
Adjust the numbers to match your job risk, lead times, and client profile.
Tip: Create one template per job type—loft, extension, bathroom—so 80 percent of your payment schedule is pre-filled. Many contractors find this saves 2–3 hours per week.
(If you want more depth on billing cadence, learn more about invoicing.)
Take 5–10 photos, note dimensions, and record a 30–60 second voice note explaining what’s done. Send it with the invoice within 24 hours. Clients pay faster when they can see the work.
Agree that sign-off happens within 24–48 hours of submission unless the client raises a specific issue. No vague “we’ll review next week.” Put this in your proposal.
Staying polite but firm protects your timeline and sets a professional tone. Always follow the contract and local rules.
If weather or supply delays move milestones, issue a brief update: revised date, same payment amount, same terms. Keep the structure; just shift the timing.
| Model | When Paid | Good For | Watch-Outs |
|---|---|---|---|
| Deposit + Milestones | Deposit; then at 3–5 clear stages | Most residential and small commercial | Set short terms; define sign-off windows |
| Materials-Front-Loaded | Deposit; materials on site; reduced later stages | Material-heavy jobs with long lead items | Store materials securely; document delivery |
| Percentage Draws | 20/30/30/20 or similar by stage | Larger builds needing predictable cash | Avoid vague percentages; use stage definitions |
Pick the model that matches your risk, lead times, and client type. Many teams blend models—e.g., materials-front-loaded for kitchens, standard milestones for general builds.
A fair payment schedule balances your cash needs with client confidence. Commonly, builders use a deposit (10–30 percent), material or early-stage payment, two to three milestone payments tied to visible work, and a short final payment window (7–10 days). Keep each milestone specific and include a clear sign-off process.
Set the deposit to cover mobilisation and any immediate materials. Many contractors use 10–30 percent depending on job size and lead times. If the job has custom items with long lead times, you may take a higher early payment when those materials are ordered or delivered. Always explain what the deposit covers.
Spell out steps in the proposal: reminder at day 3, pause notice at day 7, demobilisation until paid, and any lawful admin or interest charges. Send proof of work (photos, notes) with each invoice. Keep communication polite and written, and follow your contract and local regulations.
If materials are custom, expensive, or have long lead times, it’s sensible to ask for a materials payment when placing orders or upon delivery to site. Document orders and deliveries with photos and receipts. This reduces your risk and keeps the job moving without funding it from your pocket.
Put the schedule near the front, with 3–6 clear milestones, amounts, and 7–14 day terms. Add sign-off steps and what happens if a payment is late. Use a system like Donizo to generate a branded PDF, get an e-signature, and convert each stage to an invoice when it’s reached.
Tight payment schedules protect your cash, calm clients, and cut disputes. Aim for 3–6 visible milestones, 7–14 day terms, and a clear sign-off process. Separate variations, use deposits to cover early costs, and act fast on late payments. With Donizo, you can build schedules into proposals using voice, get e-signed acceptance, and convert stages to invoices in one click—often saving 2–3 hours per week. Set up one template today, send it for e-signature, and start the next job on a schedule that gets you paid.
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