On a remodel that runs six or eight weeks, waiting until the end to get paid means you're carrying materials, subs, and payroll for the whole job. Progress billing fixes that: you split the contract into payments tied to milestones, and the client pays as the work gets done.
This post walks through a common residential remodeling payment schedule, how to set one up, and how to keep change orders from turning the final invoice into an argument.
Note: this is about a contractor billing a homeowner. A construction loan's "draw schedule" (how a bank releases loan money to a builder) is a different thing, though it uses the same word.
What is progress billing?
Progress billing means invoicing a project in stages instead of all at once. Each stage, called a draw, is a share of the contract price that comes due at a milestone everyone can see: demo is done, rough-ins have started, the job is complete. The draws add up to the full contract.
For residential remodeling, draws are usually a percentage of the signed estimate. Larger commercial work often bills by percent complete per line item and holds back retainage, but most remodelers don't need that complexity.
A typical remodeling payment schedule: 10 / 40 / 30 / 20
Here's a schedule many remodelers use, on a $100,000 kitchen and bath project:
| Draw | When it's due | Share | Amount |
|---|---|---|---|
| 1. Deposit, plans and permits | At signing | 10% | $10,000 |
| 2. Demo day | The day demo starts | 40% | $40,000 |
| 3. Start of rough-ins | When plumbing, electrical and HVAC begin | 30% | $30,000 |
| 4. Completion | At the final walkthrough | 20% | $20,000 |
Why it's shaped this way:
- The deposit holds the client's spot on your schedule and covers design and permit time.
- The big draw on demo day covers the heaviest material orders: cabinets, tile, fixtures, often bought weeks ahead.
- The rough-in draw pays for the trades as they start.
- The final 20% is enough that the client cares about the punch list, without leaving you exposed if they drag their feet.
Some states limit how large an upfront deposit on home improvement work can be, so check your state's rules before you set the first draw.
How to set up a draw schedule
- Put it in the estimate. The payment schedule should be in what the client signs, so nobody is surprised later.
- Tie each draw to something visible. "Demo day" or "start of rough-ins" works. "When we're about halfway" doesn't.
- Make it add up to 100% exactly. Percentages of an odd total leave stray pennies. The last draw should take whatever's left so the invoices match the contract to the cent.
- Invoice the day the milestone hits, not at the end of the week. Every day you wait is a day of cash flow you're financing.
Where change orders fit
Change orders are where draw schedules fall apart. The client approves a few extras along the way, nobody re-figures the draws, and the final invoice suddenly carries $8,000 the client forgot about.
Two simple rules prevent that:
- Don't change the draw percentages. Keep the schedule tied to the original estimate.
- Add approved change orders to the next draw. Each draw invoice lists its share of the estimate plus any approved change orders not yet billed, as separate lines. The client sees exactly what they're paying for, close to when they approved it.
On the example above, if the client approves a $1,300 pendant-light change order after demo, the rough-in invoice reads: $30,000 (30% of the estimate) plus $1,300 (Change Order 1) for $31,300 total.
Common draw schedule mistakes
- Front-loading too much. A huge first draw can make clients nervous, and in some states it isn't allowed.
- Back-loading too much. If 40% is due at completion, you're financing the job and handing the client a lot of leverage at the end.
- Billing change orders all at the end. That's the fastest way to a dispute. Bill them as you go.
- Not tracking what's been invoiced. Know at any moment: contract total, invoiced, paid, and outstanding.
Progress billing in BuildSuite Invoicing
BuildSuite Invoicing does this for you:
- Add a payment schedule to an estimate. The 10/40/30/20 split is one click, and you can change the names and percentages.
- Once the client signs the estimate, each draw has a Create invoice button. The invoice includes the draw amount plus any approved change orders that haven't been billed.
- Draws always add up to the exact estimate total, down to the cent.
- Each job shows its contract total (estimate plus approved change orders), invoiced, paid, and outstanding.
- Optional reminders email the client when a draw invoice is 3 and 7 days past due.
BuildSuite Invoicing is in early access and launches at $12.99/month. Learn more.