Progress Billing & Draw Schedules for Residential Contractors

What progress billing is

Progress billing is exactly what it sounds like: you bill for the progress you've made. Rather than one invoice at the end of a $50,000 kitchen, you invoice in pieces: a slice when demo and rough-in are done, another when cabinets are set, a final when the job is complete and punched out.

Each invoice represents work that's actually finished and materials that are actually installed. The client pays for value they can see, and you get paid close to when you incur the cost, instead of carrying the whole job on your own money for weeks. If the concept of that timing gap is new to you, start with construction cash flow 101.

What a draw schedule is

A draw schedule is the roadmap for those payments. It spells out, before the job starts, how the contract price is divided across the job and what has to be true for each payment ("draw") to be released.

A simple residential draw schedule might look like:

• Deposit / mobilization: a portion up front to fund initial materials and get started
• Draw 1: on completion of demo and rough framing/mechanical
• Draw 2: on completion of drywall and surfaces
• Draw 3: on completion of finishes and fixtures
• Final payment: on substantial completion and punch-list sign-off

The percentages vary by job type and by what the work actually requires. The principle stays the same: each draw is tied to a visible, verifiable stage, so nobody argues about whether it's earned.

Why tie draws to completed work, not dates

It's tempting to bill by the calendar, "every two weeks." Don't. Calendar billing invites disputes when the schedule slips, and it disconnects payment from value.

Tie draws to milestones the client can see and verify: rough-in passed, cabinets installed, tile complete. When a payment is anchored to a concrete result, the client understands exactly what they're paying for, and you have a clean answer if they hesitate: the work is standing right there. This also protects you: if a client stops paying mid-job, you've already collected for everything completed to that point, not just a slice.

Building a draw schedule that holds up

A few habits make progress billing smooth instead of contentious:

Define each milestone in plain language. "Rough-in complete and inspection passed" is clear. "Phase 2" is not. The more specific the trigger, the fewer arguments later.

Front-load enough to stay ahead of costs. Line up each draw so the money collected by that point covers the money you've spent by that point. If your biggest material buy is early, weight the deposit and first draw accordingly.

Don't leave too much for the end. A common mistake is a small deposit and a huge final payment. That leaves you carrying the job and hands the client all the leverage at the finish. Keep the final payment meaningful but not oversized.

Put it in the contract. The draw schedule should live in the signed agreement, with amounts and triggers written out, so it's not a conversation you're having under pressure mid-job. See structuring a payment schedule for how deposits and milestones fit together.

Invoice the moment a draw is earned. The schedule only helps if you actually send the invoice when the milestone hits. A draw earned Tuesday and invoiced the following Sunday is four days of cash you gave up for no reason.

Progress billing and retainage

On some jobs, especially where you're a sub to a larger GC, a percentage of each progress payment gets held back as retainage until the whole project is done. That's normal, but it's still your money sitting in someone else's account. Track it deliberately so you collect every dollar at closeout. Retainage has its own guide in this cluster.

Making it painless

The reason many residential GCs never adopt progress billing isn't that they don't believe in it. It's that building the schedule, tracking which milestones are done, and sending each invoice on time is a lot of admin to juggle from a truck.

TradesMetrics builds the draw schedule straight from your estimate and contract, tracks progress against each milestone, and sends the payment request the moment a stage is complete, so the structure that keeps you funded actually runs itself.

Where to go next

Pair this with how to structure a payment schedule and how to get paid faster. For the bigger picture, see the construction project management pillar or the cash flow hub.