A Contractor's Guide to Getting Paid on Schedule

Contracting has a cash flow problem baked into it: you buy materials and pay crews weeks before the client pays you. A job can be profitable on paper and still sink you if the money lands sixty days late. The contractors who stay calm about money aren't luckier, they just front-load the payment conversation. Schedule, deposit, draws, and final payment all get agreed before a tool comes off the truck, and every invoice after that is just the plan executing.

Set the Payment Schedule Before the Job Starts

Every job over a few thousand dollars should have a written payment schedule in the contract: how many payments, what triggers each one, and how many days the client has to pay after each invoice. Tie payments to visible milestones rather than calendar dates, because homeowners pay happily for progress they can walk through and slowly for dates on a calendar. For residential work, due on receipt or net 7 is normal and nobody serious blinks at it. Commercial work and general contractors will push you to net 30 or worse; price that waiting into the bid, because financing someone else's project is a service, and services cost money.

Deposits That Cover Real Exposure

The deposit's job is to cover what you're risking before the first draw: materials, mobilization, and a chunk of early labor. For most remodel and trade work that lands between 10% and a third of the contract price. Two cautions here. Several states cap deposits on home improvement contracts, some as low as 10% or a fixed dollar amount, so check your state's rules before setting a habit. And special order materials deserve their own treatment: get them paid in full or near it up front, because a returned custom window is a paperweight. Send the deposit invoice the day the contract is signed, marked clearly as a deposit against the contract total.

Progress Draws Tied to Milestones

Between deposit and final payment, draws keep your outlay and the client's payments roughly in step. The goal is simple: never be more than one draw's worth of money exposed at any point in the job.

Invoice the moment a milestone lands, ideally the same day, with photos attached. A contractor invoice template that shows the contract total, this draw, and the remaining balance answers the client's questions before they ask. The full pattern is covered in deposit invoices and progress billing.

Retainage and the Final Payment

Keep the final payment small on purpose, 5-10% of the contract, because the last check is always the slowest one. A homeowner staring at a nearly finished kitchen loses urgency fast, and commercial jobs often hold retainage, typically 5-10%, until completion or beyond. Protect yourself three ways: define completion in the contract as punch list done, not perfection; do the final walkthrough with the client and get a signature on it; and invoice the balance that same day. If you're doing commercial work, know your state's prompt payment and retainage rules, and never sign a final lien waiver before the final check clears. Conditional waivers exist for exactly this reason.

When a Payment Stalls Anyway

Chase politely and immediately. A reminder the day after the due date, a phone call at a week, and a paused schedule at ten days, exactly as the contract says. Pausing work feels drastic, but it's the contract doing its job, and it resolves most stalls within days because the client wants the project moving more than they want to sit on a check. Contractors also carry a tool most trades don't: lien rights. Preliminary notice requirements and deadlines vary by state and they expire fast, so know yours before you need them. A polite letter mentioning a lien deadline gets wires sent same-day. For the full escalation path, see what to do when a client won't pay.