Draw Schedule Template: How to Align Client Payments with Project Milestones

In construction, “profit” is theoretical, but “cash flow” is reality. You can have a project with a 25% projected profit margin, but if your Draw Schedule is poorly structured, you will run out of operating capital before you reach the drywall phase.

Many General Contractors make the fatal mistake of “back-loading” their contracts—agreeing to get paid only after massive tranches of work are 100% complete. This effectively makes you the bank for your client, forcing you to float tens of thousands of dollars in labor and material costs.

To help you maintain liquidity, we have designed a Construction Draw Schedule Template that balances client trust with contractor solvency.

[Download the Draw Schedule Template (Excel)]

The Strategy Behind a Strong Draw Schedule

A professional draw schedule is not just a list of dates; it is a cash flow instrument. Our template allows you to structure payments based on Percentage of Completion (POC) or Hard Milestones.

1. The Deposit (Mobilization)

Never start a project with $0 in the bank. Our template includes a line item for “Mobilization/Deposit” (typically 10-20%). This capital is required to secure permits, pay insurance premiums, and place deposits on long-lead items like windows or cabinetry.

2. Front-Loading the Schedule of Values

“Front-loading” is the practice of allocating a slightly higher value to the early phases of construction (Demolition, Foundation, Framing).

• Why do this? Construction projects tend to “bleed” cash at the start due to heavy equipment and material purchases. By weighing the early draws slightly heavier, you ensure you have positive cash flow to pay your subcontractors on time without dipping into your line of credit.

3. Retainage Management

The template includes an automatic column for Retainage (typically 5-10%). This is the money the client holds back until the final punch list is complete.

• The Trap: If you don’t track retainage separately, you might think you have collected 100% of your fee when you have actually only collected 90%. This template keeps that liability visible.

Best Practices for Billing

Avoid “Calendar Billing”

Do not tie payments to dates (e.g., “Payment #3 due on Nov 1st”). If the project is delayed by rain, the client will refuse to pay because the work isn’t done.

• The Fix: Tie payments to Milestones (e.g., “Payment #3 due upon completion of Roof Dry-In”). This aligns incentives: you work faster to get paid faster.

The “Lien Waiver” Exchange

A professional draw request should always include a Lien Waiver. This is a document that says, “Upon receipt of this $20,000 payment, I waive my right to file a lien for this specific amount.”

• Why it matters: It gives the client (and their bank) peace of mind that you are paying your subs, which speeds up the approval of your check.

Stored Materials

If you buy $15,000 of flooring that is sitting in your warehouse waiting for installation, you should bill for it. Our template includes a section for “Materials On-Site / Stored,” allowing you to recoup that cash immediately rather than waiting for installation.

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The Danger of Manual Invoicing

While this Excel template provides a solid structure, executing it manually is prone to human error.

The “Forgot to Bill” Syndrome

When you are managing job sites, it is easy to forget that you finished the “Rough Plumbing” milestone on Tuesday. If you wait until Friday to bill, and the client takes 5 days to pay, you have delayed your cash flow by a full week simply due to administrative lag.

Math Errors in Retainage

Calculating 10% retainage across a cumulative schedule of values is complex in Excel. One broken formula can result in you under-billing the client by thousands, or over-billing them and damaging the relationship.

The Paper Chase

Sending an Excel invoice usually triggers a back-and-forth email chain: “Can you send the backup PDF?” “Where is the plumber’s lien waiver?” “Did you approve this change order?” This friction slows down payment.

Automated Invoicing with Bid Bench

Bid Bench automates your accounts receivable process, ensuring you get paid the moment a milestone is hit.

• Milestone Triggers: As you mark items “Complete” in the Project Management view, Bid Bench automatically drafts the invoice for that milestone.
• Automated Retainage: The system calculates retainage automatically on every invoice, tracking the cumulative “held” amount so you know exactly what is owed at the end of the job.
• Document Packet Generation: When you send an invoice through Bid Bench, it automatically attaches all relevant files—PDF backup, site photos, and lien waivers—into a single, professional packet for the client.

Stop acting as the bank.
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