Late Payment and Non-Payment: A Norm in the Construction Industry
Imagine a world where payments flow like a smooth river. Jacob dives into the real deal, shedding light on the struggles subcontractors face with those pesky long payment terms and dreaded late payments. Brace yourself for insights that could save your cash flow and business mojo.
Jacob's wisdom is your secret weapon against payment turmoil. He shines a spotlight on the domino effect of late payments and why paying subcontractors on time is the ultimate power move. Want to level up your payment game? Jacob's got your back with strategic gems: from deciphering payment terms to unraveling the contract sum, managing retentions, and acing final account procedures.
KEY TAKEAWAYS
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Late payment is a prevalent issue in the construction industry, with over 52.9% of invoices being paid late in 2022.
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Cash flow is crucial for subcontractors, and late or non-payment can cause financial strain and affect their ability to meet financial obligations.
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It is important for subcontractors to understand the payment terms outlined in their contracts, including payment dates, breakdown of the contract sum, retentions, and final account procedures.
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Subcontractors can negotiate for better payment terms, such as shorter payment periods, to improve cash flow and incentivize suppliers to work with them.
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If subcontractors do not receive payment on time, they should follow a systematic approach, including sending reminders, issuing notices, and seeking professional advice if necessary, to ensure timely payment and protect their interests.
BEST MOMENTS
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"Cash flow is critical for running a successful business and some of the construction industry's payment terms are absolutely unfriendly to cash flow."
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"A few years ago, a government report found that many people in the construction industry thought that late payment and non-payment is pretty much a norm."
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"More than half of all invoices sent to construction firms were paid late across 2022."
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"When a payment from a customer is delayed or not received at all, it's financial strain straight away."
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"Don't add late payment to the mix. Don't make that be something you can be criticized about."
ABOUT THE HOST
Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
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