A profitable job and a job that pays you on time are two different things. Plenty of contractors make 25% on paper and still borrow against a credit card in week three — because the schedule they wrote collects the money after they've already spent it.
Last reviewed: August 2026 · 8 min read
The short version. Tie every draw to a physical milestone you can point at, sequence them so each draw lands before you pay for the phase it funds, and keep the final payment small — 5–10%.
Same $60,000 kitchen, same 25% margin, two schedules: the eight-draw version below never dips below zero. The three-draw version has you $21,800 out of pocket at its worst point.
"Rough-in inspection passed" beats "week 3" every time. A physical milestone is verifiable by walking the job — nobody argues about whether drywall is hung. A date-based draw invites a fight every time a supplier is late, and in states that require progress payments not to exceed the value of work actually performed, a calendar-triggered payment can be non-compliant as well as awkward.
Write milestones a stranger could check: "demolition complete and debris removed", not "demo phase substantially underway."
For each phase, ask: what do I have to pay, and when does the draw covering it arrive? If the cabinet supplier wants 50% at order and your cabinet draw is at installation, you've just volunteered to lend the client $7,000 for six weeks. Move the draw to the order, or get supplier terms — but don't leave the gap in and hope.
The final payment should be small enough that it isn't worth holding hostage over a scuffed baseboard, and big enough that you'll still show up for the punch list. Somewhere in the 5–10% range. A 30% final payment turns your last two days into a negotiation you can't win, because they have the money and you have already done the work.
California job, so the deposit is capped at $1,000 — the "$1,000 or 10%, whichever is less" rule, which on any contract over $10,000 means a flat $1,000. (If that's news, read deposit limits by state first — it changes how the front of every schedule has to be built.) Assume $45,000 of direct cost and $15,000 of gross profit.
| # | Milestone that triggers it | % of contract | Draw | Cumulative |
|---|---|---|---|---|
| 1 | Contract signed — statutory deposit cap | 1.7% | $1,000 | $1,000 |
| 2 | Cabinets & windows ordered — special-order deposit | 15.0% | $9,000 | $10,000 |
| 3 | Demolition complete, debris removed | 12.0% | $7,200 | $17,200 |
| 4 | Rough plumbing, electrical & HVAC in, inspection passed | 18.0% | $10,800 | $28,000 |
| 5 | Drywall hung, taped and primed | 15.0% | $9,000 | $37,000 |
| 6 | Cabinets set, countertop templated | 20.0% | $12,000 | $49,000 |
| 7 | Tile, paint, trim and fixtures complete | 12.0% | $7,200 | $56,200 |
| 8 | Substantial completion, written punch list issued | 6.3% | $3,800 | $60,000 |
| Contract total | 100% | $60,000 |
Draw 2 deserves a note. Cabinets and windows are usually the biggest and earliest cash outlay on a kitchen, and they're ordered long before they're installed. Several states explicitly allow the actual cost of special-order materials in addition to the deposit; others don't, and in "value of work performed" states you should check with your attorney how delivered-but-uninstalled material is treated. Whatever your state allows, put the draw at the order, not at the installation — that single placement decision is worth more to your cash position than the other seven combined.
A draw schedule is only good if you check it against the outflow. Here's the same job with what you actually pay out at each stage:
| Stage | Cash in | Cash out | Your position |
|---|---|---|---|
| Contract signed | +$1,000 | — | +$1,000 |
| Cabinets & windows ordered (50% supplier deposit) | +$9,000 | −$7,000 | +$3,000 |
| Demo (labor + dumpster) | +$7,200 | −$3,300 | +$6,900 |
| Rough-in (MEP subs) | +$10,800 | −$8,000 | +$9,700 |
| Drywall | +$9,000 | −$4,500 | +$14,200 |
| Cabinets set (balance + countertop + install) | +$12,000 | −$13,000 | +$13,200 |
| Finishes (tile, paint, trim, fixtures) | +$7,200 | −$8,000 | +$12,400 |
| Substantial completion (punch) | +$3,800 | −$1,200 | +$15,000 |
| Totals | $60,000 | $45,000 | $15,000 profit |
Never negative. Not once. The two stages where outflow exceeds the draw — cabinets and finishes — are absorbed by the cushion built up earlier, which is exactly what the cushion is for.
Now the version most contractors actually write, because it's the one clients propose: deposit, halfway, completion.
| Stage | Cash in | Cumulative out | Your position |
|---|---|---|---|
| Contract signed | +$1,000 | $0 | +$1,000 |
| Cabinets & windows ordered | — | $7,000 | −$6,000 |
| Demo complete | — | $10,300 | −$9,300 |
| Rough-in complete | — | $18,300 | −$17,300 |
| Drywall done — the day before the "halfway" draw | — | $22,800 | −$21,800 |
| "Halfway" draw arrives | +$29,000 | $22,800 | +$7,200 |
| Cabinets, finishes, punch | — | $45,000 | −$15,000 |
| Final payment | +$30,000 | $45,000 | $15,000 profit |
Identical job. Identical profit. Identical client. The only difference is where the draws sit — and it's the difference between never touching your own money and being $21,800 underwater on a $60,000 kitchen, twice, while carrying a $30,000 final payment you now desperately need.
"Complete satisfaction" is a subjective standard with no defined endpoint. A client who is unhappy about something unrelated — a delay, a neighbour, a countertop they chose themselves — has an unlimited hook to hang it on. Substantial completion is an objective, defined moment; the punch list is a finite, written list; the holdback gives them real protection while capping your exposure at the value of the actual remaining work.
The second version doesn't hand your entire final payment to a building department's scheduling calendar. If the inspector is booked three weeks out, or the delay is on something the owner supplied, you're not the one financing the wait. Carve out only the piece that genuinely depends on the inspection.
A schedule is your first line of defence; mechanic's lien rights are the backstop. In most states those rights depend on a preliminary or pre-lien notice served early in the job — California, for example, generally requires a preliminary notice within 20 days of first furnishing labor or materials — and missing that window can forfeit the lien entirely, no matter how right you are about the money.
Deadlines, forms, and who must be served vary enormously by state and by whether you're a prime or a sub. Find out your state's rule once, build serving the notice into your job-start checklist, and it costs you a stamp instead of a receivable. Don't take the 20 days as gospel outside California — confirm your own state's deadline with a construction attorney.
Write the schedule on the Contract tab under Payment Terms — either freehand or with the AI draft as a starting point — then bill against it from Invoicing:
What the app won't do is tell you whether the schedule is sequenced right — that's the cash-out column, and only you know your supplier terms. Build the schedule against your actual outflow once, and you can reuse the pattern on every kitchen after it.
Enough that you're never funding the job. For a $40,000–$80,000 kitchen or bath, that's usually six to eight tied to physical milestones. More draws don't change what you collect in total — only how long you're out of pocket between spending and getting paid.
Milestones, and physical ones. "Rough-in inspection passed" can be verified by looking; "week 3" starts an argument the first time a supplier is late. In states requiring progress payments not to exceed the value of work performed, date-triggered draws can also be non-compliant.
5–10% of the contract is a common range. Small enough that it isn't worth withholding over a paint touch-up, large enough that you'll come back and finish the list.
Explain it as scheduling rather than trust: more frequent draws mean you're paying subs and suppliers on time, which is what keeps their job moving. If they still insist, price the float — carrying $20,000 for a month has a real cost — or decline the job. What you shouldn't do is accept the schedule and absorb the cost silently, which is the option most contractors take.
It depends on your state and how its rules treat delivered-but-uninstalled materials, and it's the single most common place a well-intentioned schedule goes non-compliant. In states with a value-of-work-performed test, get specific advice before you write a materials draw. Where it's allowed, tie it to delivery to the site with a receipt attached, not to the order date.
Say so explicitly on each change order — either billed with a specific progress payment or invoiced separately on completion. That's not just tidiness; in California, stating the effect on the schedule of progress payments is one of the things a change order is legally required to contain. See how to write a change order that actually gets signed.
Set the schedule on the Contract tab, then hit Deposit, Draw, or Remaining from Invoicing — with live Invoiced, Collected, and Outstanding totals. 14-day free trial — $0 today.
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