Construction Late Payment
You have completed the work. But the construction company you were working for is late paying you or refuses to pay you. What do you do?
or Buy all the templates on this website (including the late payment letter templates) for £39.95. This bulk order saves you over 25%. (offer does not include the construction estimation template).
Late payment in the construction industry cost's construction companies millions of pounds every year in man hours chasing the late payments or actually having to write off the unpaid invoices.
Late payments cause huge cashflow problems for construction companies.
So, why do construction companies focus more resources on delivery of their products or services over actually being paid?
You have made no profit from the project until the money is sitting in your bank account.
So what's the solution?
Being organised about your invoice submittal, payment terms and invoice payment chasing goes a long way to solving the problem.
Here are some tips:
1. Put your payment terms on your quotations and invoices (max 30 days from the end of the month).
2. Submit your invoices in line with the payment schedule contained within your contract.
3. Have you received a Pay Less Notice in accordance with the payment schedule within your contract. If not the contractor is not entitled to withhold any monies.
4. The week before the payment becomes due. Email and phone your client and remind them that the payment is soon due.
5. If the payment is not paid on the due date. Start recovery action immediately by emailing and sending Letter A. Letter A asks your client why the payment is late and to pay immediately.
6. If after seven days, you still have not been paid. Send Letter B stating your right to levy interest and costs as per the "Late Payment of Commercial Debt (Regulations) 2013".
7. If after a further seven days you still have not been paid you can either send Letter C adding charges and interest to the late payment and advising of possible adjudication or if you are still on site working on the project you can send a seven day letter notifying that unless full payment is made within 7 days you will pull off site until payment is made.
The Construction Act 2009 gives you tools to use. Please use them. Cash is king.
We supply the templates for Letters A,B,C and the seven day letter as template downloads.