How contractors get paid, from deposit to final invoice.

Most contractors get paid in stages: a deposit before work starts, progress payments as the work moves, and a final payment when the job is done. Larger jobs may use draws tied to milestones, and some commercial work holds back a small retainage until the end. The right schedule protects your cash and keeps the client comfortable.

The common ways contractors are paid

• Deposit: a payment before the job starts, often used to order materials and hold the schedule.
• Progress payments: invoices at set points, such as after demolition, after rough-in, or after cabinets are installed.
• Draws: on bigger builds, payments released at milestones, sometimes through a lender after an inspection.
• Final payment: the balance after the work is complete and the punch list is done.
• Retainage: on some jobs, a small percentage is held until the end to cover any fixes.

Deposit limits and payment rules differ by state. Check your state's rules and your contract with a lawyer before setting your terms.

Example payment schedule for a remodel

A $40,000 kitchen remodel might be billed like this:

1. Deposit when the contract is signed: 30%, $12,000.
2. After demolition and rough-in: 30%, $12,000.
3. After cabinets and countertops are installed: 30%, $12,000.
4. Final payment when the punch list is done: 10%, $4,000.

Tie each payment to something the client can see. Clients pay faster when they can point at the finished stage.

Why contractors get paid late

• The invoice went out days after the stage was finished.
• Extra work the client asked for was never put on an invoice.
• Nobody noticed a partial payment and the balance was wrong.
• The client was not sure what the payment was for.

How to get paid faster

• Put the payment schedule in the estimate and the contract.
• Send each invoice the day the stage is done.
• Show what was billed, what was paid and what is still owed on every invoice.
• Bill extra work right away, with its own line.
• Follow up on late invoices on a set day each week. See how to track unpaid contractor invoices.

Keep every payment on the job

In Vio, the deposit, progress and final invoices, payments and credits all sit on the same job, so the balance is always right next to the work. You can add a deposit line to your estimate with the free estimate maker today, and see what each job really leaves you with the job profit calculator.

See it on your own jobs

Read how Vio handles job costs and payments, then book a demo with Ray and bring one job with partial payments.