What is a draw schedule in construction?

A draw schedule, also called a schedule of values or payment schedule, maps the total contract price across a series of milestone-based payments. A five-draw project might tie payments to foundation completion, framing, rough-in work, drywall and finishes, and final completion. Each milestone triggers a payment application from the contractor, which the owner reviews and approves before releasing funds. The schedule is typically agreed and signed before work begins, giving both sides a clear picture of when cash is expected to move.

Draw disputes are among the most common sources of construction AR problems. An owner who questions whether a milestone is truly complete, disagrees with the percentage-of-completion claimed in a payment application, or wants additional documentation before releasing funds can delay a draw payment by weeks. Contractors who do not track draw payment dates explicitly — and follow up immediately when a payment date passes — often discover these delays much later, when the cash-flow impact has already compounded across multiple draws.

Treating draw receivables with the same discipline as any other invoice is the right operational posture. Each draw should have an expected payment date derived from the contract. When that date passes without payment, a call that day surfaces whether the delay is administrative or substantive. Most draw payment delays are administrative — someone needs to sign something, a lender needs a resubmission — and resolve quickly once the contractor calls the owner's representative directly.