Progress Claims and Draw Schedules That Protect Your Cash

Ask most builders how they set their progress claim stages and the honest answer is they copied the schedule from the last job, which was copied from the job before that, which came off a template someone handed them in 2014. Nobody sat down and worked out whether the money lands before they spend it or after.

That is a mistake that costs you real cash, every single build. Your draw schedule is the most powerful cash-flow tool you have, and it is sitting right there in your contract. Let me show you how to use it.

What a draw schedule actually does

A draw schedule (sometimes called a payment schedule or progress payment schedule) breaks the contract price into stages, and sets the amount you claim as each stage completes. Deposit, base, frame, lock-up, fixing, completion is the classic residential breakdown.

Here is the part that matters. The schedule does not just decide when you get paid. It decides who funds the build. If your claim for a stage lands in your account before you have to pay for the work in that stage, the client is funding the job. If it lands after, you are funding it out of your own pocket and waiting to be reimbursed.

That timing difference is the cash gap I describe in the pillar on cash flow for custom builders, and your draw schedule is the single biggest lever you have over it.

Front-load the schedule, legitimately

The goal is simple. Structure your stages so the money comes in slightly ahead of the spend, not behind it. This is sometimes called front-loading, and done properly it is not a trick, it is just matching your claims to when your costs actually hit.

Think about where your real money goes out early. The base stage is brutal for cash. Excavation, piering, steel, concrete, the slab gang all hit in a tight window, and on a sloping Central Coast block the site costs alone can be eye-watering. If your base-stage claim is set too low relative to that spend, you have funded the difference yourself before you have even got out of the ground.

So when you set your stages, weight the claim amounts to track the cost curve. Make sure base carries enough to cover the heavy early spend. Do not leave too much of the contract value sitting in the final completion claim, because that is the money you collect last, often after retentions, and it is the most at risk.

A word of caution. Front-loading must reflect genuine value of work done at each stage. You cannot claim for work you have not done, and depending on your contract and jurisdiction there are rules about this. I am an advisor, not your lawyer, so the wording of your specific contract and what you are entitled to claim should be confirmed with your own licensed professional. The principle is sound: align claims to spend. The execution has to stay legitimate.

Get the deposit right

The deposit is your first and cleanest piece of cash, and in residential building the maximum you can take is often capped by law depending on the contract value and your state. Within whatever cap applies to you, take the full deposit you are entitled to. It is the cheapest money you will ever have on a job because it arrives before you have spent a cent.

That deposit should cover your early mobilisation, deposits to key suppliers, and the front-end admin and design coordination that eats time before a brick is laid. Builders who undercook the deposit start every job already behind on cash.

Claim the day the stage is done, not when you get to it

The finest draw schedule in the world does nothing if your claim sits in the ute for a fortnight before you send it. I see this constantly. The frame goes up Thursday, and the frame claim does not go out until you find a spare hour the following week, by which time the timber supplier has already been paid.

Make the claim the moment the stage is complete. Same day. Have the paperwork ready before the stage finishes so it is a 5 minute job to lodge. Every day a claim sits unsent is a day you are funding the next stage with your own money. This is the same discipline I push in getting paid on time: the speed of your admin directly controls the speed of your cash.

Match your supplier terms to your draws

Here is a move most builders never make. Your cash gap is the difference between when you pay out and when you get paid. You can attack it from the supplier side too.

Negotiate proper trading terms with your key suppliers, 30 days where you can get it. If you are paying your frame supplier on 30 day terms but claiming and collecting the frame stage in 14, you have flipped the timing in your favour. The client's money is in your account before the supplier's invoice is even due. Stack that across every stage and the whole job runs cash-positive.

This is the same logic that decides whether a job makes money at all, which is why I treat margin and cash as two sides of the one coin in spotting unprofitable jobs. A job can have a healthy margin and still strangle you on cash if the timing is wrong.

Watch the back end: retentions and the final claim

The completion claim and any retention are where cash goes to get stuck. A 5 percent retention held to the end of the defects liability period is your profit, sitting in the client's account for up to 12 months. Build that reality into how you price and how you plan your cash, and chase retentions the day they are due to be released. I dig into the mechanics of that in getting paid on time.

The schedule is part of the price

Here is the mindset shift. Your draw schedule is not contract admin you fill in at the end. It is part of how the job is priced and structured. A well-built schedule on a properly priced job means you never reach into your own pocket to fund someone else's house, and you never use next job's deposit to cover last job's hole.

That starts upstream with pricing your builds so the margin is genuinely in there, then flows through the schedule so the cash actually lands when you need it.

The number that underpins all of it is your charge-out rate, because if your labour is underpriced, no draw schedule on earth will save the job. The free Charge-Out Calculator works out the real hourly rate you need once on-costs and overheads are in. And if you want me to look over a draw schedule on a live job and tell you where your cash is exposed, that is exactly what the free numbers check is for.