![]() Time-based payment schedule - This type of schedule breaks up the total value of the project into equal amounts spread over set intervals, usually monthly.There are three types of progress payment schedules depending on the size and scope of the project: This also resolves disputes before the project is completed. The main advantage of progress payment schedules is that they provide regular cash flow, as well as allowing the client and contractor to check the subcontractors work to ensure its satisfactory before payment. Progress payment schedule - These payments are made while the project is ongoing and correspond to the portion of work that is completed.For example, if the cost of installing patio doors is around $5,000 for labor and materials, then a 50% deposit would be sufficient to cover the cost of the doors, while the final payment would wrap up the time spent doing the work. The deposit should be enough to cover the materials and supplies to begin the project, while the final payment acts as an incentive to complete the project, and should cover the labor costs and profit. Deposit + final payment schedule - This is ideal for smaller projects without a huge contract value.Here’s a deeper dive in to the common types of construction payment schedules you can adopt: For example, if you have a fixed-price contract for a well-defined project, then requesting a payment every two or four weeks will keep it simply structured, while a time and materials contract requiring payment for materials and labor costs can offer more flexibility around billing. The type of payment schedule you create will depend on the billing method and contract you have with your client. Also include notes or payment terms, including any fees for late payments.Ĭommon types of construction payment schedules Payment method - Offer the client or vendor simple ways of transferring the money, including bank details if necessary.Actual amount paid and payment date - Add the amount and date the payment was deposited.Amount of payment and due date - State the amount that is to be paid at that installment and the date it is expected by.Description of work - Describe the scope of the work that is to be carried out so that everyone is on the same page.Client or project name and contact info - If you have several projects on at the same time, ensure each payment schedule is clearly labeled for the project it corresponds to so there is no confusion.It's also important the client can contact you easily to discuss any problems with payments. ![]() Your construction company name and contact info - Make your payment schedule easy for clients and vendors to identify by clearly stating your company’s details at the top of each page.What elements should be included in a construction payment schedule template?Īs well as stating when payments should be made, a construction progress payment schedule template should include the following elements listed below, in order to make anticipated payments quick and easy to process on both sides: Keeping a project on track - Thanks to a clear and transparent payment schedule, a contractor can have an overall view of the project at all times, knowing when money is available for ordering supplies and hiring extra subcontractors to keep the project moving forward.For example, if a client has financial difficulties paying for the project, the schedule will highlight missing payments and allow the contractor to pause the project until the client can resume payments. Allowing for work flexibility - By billing as you go, a project has the flexibility to be halted should any payment issues or supply delays occur.These progress pauses allow for reflection and for appropriate changes to be made, avoiding disputes arising at the end. Preventing disputes - When opting for a progress payment schedule (more details below), the client and contractor will be forced to regularly discuss the progress of the project, allowing for any issues to be raised during the work and not at the end when it is often too late, such as the project exceeding the agreed budget.Ensuring consistent cash flow - With regular scheduled payments, a construction pro knows exactly when they can pay subcontractors, suppliers and themselves, without having to wait until the end of the project to settle bills or make a profit.Why are construction payment schedules important?Ī construction payment schedule can have a positive impact on a construction pro’s bottom line, such as: ![]()
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