Pay Schedule

What it is

Every contractor I hire sends me their pay schedule as part of the bid. It’s correlated to the scope of work — specific checkpoints when they want money, tied to specific completed deliverables. Not “pay me every Friday.” Not “pay me 50% up front.” Specific items on the scope done, you release a specific amount.

I always ask for it. Written scope, walkthrough video, and a pay schedule. All three. That way when they ask for money at checkpoint one, I go look at what checkpoint one says, I go verify it happened, and then the money goes out.

Why it matters

Money is the power on a job. The law of power. No matter how good your relationship is with these guys — everybody has bills to pay, everybody has mouths to feed. They’re always working on the next thing that’s going to bring money to them. You need to be the next thing. You never pay ahead. You pay fast, but never ahead.

Somebody wants a down payment to do the work? Sorry buddy, going to have to hire somebody else. They say they need money for materials? Great — I’ll set up a Home Depot Pro account, I’ll pay for the materials directly to Home Depot. Not giving a dime until we get to the first pay period.

The other side of this is the fast payment. When they get done with the scope on the pay schedule we agreed upon, I go out of my way to get them the money fast. I’ve literally put checks in my mailbox for contractors to come grab before I started filming a video — because they sent me a bill the night before and I wanted to make sure they got that money the next day after I confirmed they did the scope. That’s the move. Pay fast after the work is verified.

That combination — never ahead, fast after — keeps them working on your job instead of the next one.

How it shows up

For MEP trades: electrical and plumbing run 65% at rough inspection passed, 35% at trim-out complete. HVAC gets more weight on the front end, 75 to 80% at rough, because the contractor is fronting equipment costs — condenser, air handler, ductwork — that’s most of the money. Never 100% until both inspections are signed off.

For cosmetic trades, I run smaller draws more often: a materials deposit at start (not a labor deposit, a materials deposit so I can control what’s actually being bought), a midpoint draw after I verify photos, and the balance at punch list complete.

Always inspect before you give a payment. Get out to the job site when nobody is there. Photos of what they claimed is complete, photos of what actually got done. If they match, the draw releases that day. If they don’t, the conversation happens on site, not over text.

And if you set clear expectations from the start — walked the scope with them, made the video together, agreed on the pay schedule in writing — holding them to it isn’t being a micromanager. It’s exactly what you said you’d do. That’s what builds relationship capital over time. Work with the same people over and over, they learn your ways, you learn theirs, and it takes way less bandwidth to get the same results.

Related

scope of work, costco bid, relationship capital, jobs menu, man day formula, inspections