How to Bill for Progress Payments as a Contractor

Progress payments, also called draws, bill the client in stages as the work advances rather than in one lump at the end. On any job that runs more than a couple of weeks, progress billing is the difference between healthy cash flow and financing the project yourself. You collect a deposit, then draws tied to milestones like rough-in, drywall, and finish, then a final payment. Each draw keeps the client invested in progress and keeps you from carrying weeks of labor and material cost with nothing coming in.

A schedule of values breaks the total contract into line items with a dollar value each, and the sum equals the contract price. Common lines include mobilization, demo, foundation, framing, mechanical rough-in, drywall, finishes, and closeout. The schedule of values is the backbone of progress billing because every draw request reports percent complete against these lines. Build it so the early lines carry enough value to cover your early costs, but keep it honest, because lenders and owners scrutinize front-loaded schedules.

A draw request, or payment application, shows the schedule of values, the percent complete for each line this period, the dollar amount earned, retainage withheld, and the net amount due. On lender-financed jobs the request often goes through an inspection before funds release. Submit draws on a regular cycle, usually monthly or at defined milestones, and include photos of completed work to speed approval. A clear, well-documented draw request gets paid faster because the owner or lender can verify progress without a site visit debate.

Retainage is a percentage, often 5 to 10 percent, the owner holds from each draw until final completion, as security that you finish the job. Track retainage as its own line so the held and released amounts are always clear. Lien waivers are documents you and your subs sign acknowledging payment, which protect the owner from double-payment claims. Conditional waivers go with the draw request, and unconditional waivers follow once the payment clears. Many lenders will not release the next draw until prior waivers are on file.

ContractShield turns the accepted quote into a milestone schedule automatically, so your schedule of values is built before the job starts. Each milestone invoice reports against that schedule, clients pay through Stripe, and funds clear on a predictable timeline. Retainage, change orders, and a photo timeline all live in one project, so your draw requests are documented and fast to approve. Overdue draws trigger automatic reminders you approve with one tap. The platform fee is 2% per job (1% client and 1% contractor) at invoicing, capped at $250 per job, with no per-lead fees ever, so progress billing keeps nearly all of every payment in your pocket.

Cadence depends on the job and the contract. Lender-financed and commercial work usually bills monthly with an inspection before each release. Smaller private jobs can bill at defined milestones instead. The rule of thumb is to bill often enough that you are never carrying more than a few weeks of cost, but not so often that the paperwork outweighs the payment. Set the cadence in the contract so there is no ambiguity, and submit each draw on the same day of the cycle so the owner or lender learns to expect and process it quickly.

Draws stall when the request is hard to verify. Vague percent-complete numbers, no photos, math that does not tie to the schedule of values, and missing lien waivers all give the owner or lender a reason to pause. On financed jobs, a missed inspection or a waiver not on file can hold the entire release. The fix is documentation: report percent complete per line, attach photos of the work, show retainage clearly, and keep waivers current. A draw request the reviewer can approve without a phone call is a draw request that gets paid on schedule.