One of the most taxing parts of a construction project is the budget, costs, and expenses. Although project managers often have mapped out the cost estimates, there are still unexpected problems that would more or less occur which can cause the most significant issues. A lack of cash flow can put a construction project to a halt. But whether you are engaged in a small or complex project it is important to have a proper construction contract payment schedule to make sure it gets completed just on time. One-time payment is quite impossible for most projects of this kind, so normally payments are made in specific schedules—more like in installments. To know more about it, let us discuss this further below. And if you need to prepare a payment schedule, then check out our free construction contract payment schedule samples that are available for download on this page.
10+ Construction Contract Payment Schedule Samples
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11. Standard Construction Contract Payment Schedule
What Is a Construction Contract Payment Schedule?
It is usually written in a construction contract the payment terms and schedule between the project owners and their contractors. Typically, they break the full contract value into progress payments made at regular intervals during the project schedule. In simple terms, large payments are broken up into small chunks. And payment schedule is the timeline of payments to be made throughout the lifetime of the project until it is completed. Contractors when tracking their payments use a draw schedule or payment schedule which can help them identify their income throughout the entire project. But of course, a construction contract payment schedule isn’t limited just to contractors as this can be used for vendors as well.
How To Create a Construction Contract Payment Schedule?
Payments are often negotiated in advance before being written in the contract, but at most this can be done through a monthly schedule or when milestones are completed. With a proper payment schedule, regular payments make it easier for contractors since there would be a consistency in cash flow and may offer work flexibility. Of course, a construction contract payment schedule may have its setbacks such as delay billings and discrepancies that can cause also delays in payment thus the project won’t continue as planned. But however you wish to proceed, as long as the payment schedule is written in the construction contract, then it must be properly followed if both parties do not want to pursue legal action. Now, most payment schedules are different from the rest but they should contain the following elements below:
1. Contact Information
The name of both parties which is the project owner and the contractor or vendor should be written in the document.
2. Description of Work or Materials
Describe the time of work or materials that will be provided by the contractor or vendor.
3. Payment Terms
Describe if the payment should be made per milestone which is the expected work done and the exact amount for each draw. Or should payment be made on monthly basis—mostly if the vendor is to supply materials for the project. A payment schedule will depend on the scope of the project, so it’s best to make this clear beforehand.
4. Amount Due and Due Date
Indicate the amount of the payment due and its corresponding due date or deadline of payment. You may want to include how much down payment is required and the final payment.
5. Payment Method
State whether the payment could be made in cash, cheques, or credit card.
What Is a Construction Contract?
This is a legal document that binds two parties that specifies the type of construction that will be done and the associated expenses.
What is a Change Order Modification?
This is an agreement between a contractor and a consumer that makes modifications to an existing construction contract.
What Is a Contractor?
A contractor is an entity that provides skills or services to companies for a set period.
A well-crafted construction contract payment schedule will ensure contractors, vendors, or even suppliers are paid on time and that the project will be completed on schedule. Our payment schedule templates allow you to simply and effectively create a document that contains all of the necessary components, so don’t forget to check it out.
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