Draw schedules and progress payments, explained

Almost no construction project is paid in one lump at the end. Money moves in draws — payments released as work progresses — and understanding how they are structured is the difference between paying for what has been built and paying ahead of it.

The schedule of values

A schedule of values breaks the contract into line items, each with a value, adding up to the contract total. Foundation $28,000, framing $54,000, roofing $31,000, and so on. It is the backbone of every payment conversation that follows.

Ask for it before work starts. A contractor who cannot produce one is asking you to release money against a number nobody can check.

How a draw request should read

A proper draw request states, per line: the total value, the percentage complete this period, the cumulative percentage, the amount earned, retainage withheld, and the net due. That format lets you check it by walking the job rather than by trusting it.

Front-loading

The most common problem is not a fake line — it is a real line billed early. Watch for large percentages claimed on work that is easy to overstate, or for material deliveries billed as though they were installed. Material on site is worth something, but it is not the same as work in place, and it walks away if a contractor does.

What to get with each payment

• The updated schedule of values with percentages
• Lien waivers from the subs and suppliers paid out of the previous draw
• Any change orders affecting the amount, approved in advance
• Photographs of the work being claimed — trivial to produce and it settles most questions before they are asked

Keep the ledger yourself

Do not rely on the contractor's accounting as your only record. Keep your own list of what was paid, when, against which line, and what was outstanding at the time. It takes minutes per draw and it is the document that answers every question later — including whether you have overpaid.