Deposits and payment schedules: how contractors get paid on time

Cash flow kills more contracting businesses than lack of work. If you’re buying materials and paying a crew before you see a dime, you’re financing your customer’s project — and one slow payer can sink your month. A clear payment schedule fixes that.

A sensible milestone structure

• Deposit at signing to secure the slot and cover initial materials.
• A progress payment at a clear milestone (e.g., rough-in or demo complete).
• Another at substantial completion.
• A small final payment after the walkthrough and punch list.

Put it in writing, up front

Payment terms belong in the proposal the customer signs — not a surprise later. When the schedule is spelled out and tied to milestones, customers pay more reliably because they know exactly what triggers each payment.

Check your local rules

Some states cap how large a deposit you can collect on home-improvement work. Know your local limits and stay within them — it protects you and builds trust.

Make it automatic

DoneDeal lets you attach a milestone payment schedule to every proposal, so the terms are clear and signed before the work starts. Try it free.