When are commercial contractors typically paid by the owner?

In the construction industry, commercial contractors are typically paid on a monthly basis. This payment schedule is generally outlined in the contract between the contractor and the owner and aligns with the progress of the project. Monthly payments allow for a systematic assessment of work completed, ensuring that the contractor is compensated for the services and materials provided while maintaining cash flow for the owner.

This payment method can include progress payments based on the percentage of work completed at specific milestones, making it a standard practice. Establishing a recurring payment period also helps maintain clear financial planning for both the contractor and the owner. In contrast, payment options such as as costs are received or lump sums at the end of the project may not adequately reflect ongoing project progress and can lead to financial management challenges.