A draw schedule (or payment schedule) refers to a payment plan that is typically established between a contractor and their client. The purpose of this schedule is to ensure that the contractor receives timely payments for the work that they have completed throughout the project.
Draw schedules are usually divided into several stages, each of which corresponds to a specific phase or milestone of the construction process. At each stage, the contractor will receive payment from the client based on the work that has been completed.
Draw schedules are a vital tool for managing cash flow in the construction industry and are typically agreed upon in the initial contract negotiations between the contractor and the client. They help to ensure that all parties involved in the construction project are on the same page regarding payment terms and schedules, allowing for a smoother and more efficient construction process.