Draw Schedule
Draw schedule definition. Learn how to structure payments based on project milestones for healthy cash flow.
Calculation Formula
Draw Amount = (Milestone % Complete × Total Contract) - Retainage Real Contractor Example
A $200,000 addition has a draw scheduled for the completion of the foundation (15% of project).
How a Draw Schedule Works
A draw schedule lists when the contractor may request payment and how much, usually tied to milestones such as foundation complete, framing complete, rough-ins passed, and final completion. Each draw is a percentage of the contract price, less any retainage the contract holds back.
Using the example above, 15% of a $200,000 contract is $30,000. If the contract holds 10% retainage, the net payment for that draw is $27,000.
Setting Draws That Protect Your Cash Flow
Tie draws to when you actually spend money, such as mobilization and material purchases, not only to what looks finished. Keep each draw small enough that one late payment does not stop the job. Invoice the day a milestone passes, and write the payment due date into the contract.
Avoid a schedule where the final draw is a large share of the price. The more you finance yourself up front, the more a slow-paying client costs you.
Frequently Asked Questions
How many draws should a remodel have?
Enough that no single missed payment is more than you can comfortably fund. Small jobs may use two or three draws, longer projects more, each tied to a clear, verifiable milestone.
What is the difference between a deposit and a draw?
A deposit is paid before work starts. Draws are paid as defined milestones are reached. Many contracts use both: a deposit to start, then draws as the work progresses.
What if the owner pays a draw late?
Follow your contract terms and your state rules. Many contracts allow work to pause after written notice of non-payment. Have a local attorney review that clause, because this is not legal advice.
Related terms
Put This Into Practice
Knowing the definition is step one. RemodelFin tracks this in real time on every job — no spreadsheets.