Late payments in construction are crippling the sector, with big players often taking months to pay those contractors unfortunate enough to be caught in their supply chains. And the issue is likely to be contributing to the epidemic of construction firm liquidations blighting the sector – there were 2,250 in 2015 alone.
Whether it’s waiting months to be paid, accepting reduced payments or simply giving up because legal action is unaffordable (after all, they haven’t been paid), subcontractors often find themselves trapped in a vicious circle. To help ease the issue, the Construction Supply Chain Payment Charter was introduced in 2014 – putting in place a timeframe for payments across the industry – but has it made a difference?
By taking control of your application for payment and valuation processes, the issue of late payments in construction can be tackled efficiently. And deploying systems like a cloud-based application service will support any procedures you put in place for dealing with those dragging their heels in paying up.