EP 12 - Why you’re not getting paid on time

I’ve had lots of conversations with Subcontractors about them not getting paid, and I’ve also experienced the same spurious excuses clients give you as to why your payment has been delayed. 

In this video, I share tips on how to avoid the common excuses and how you can reduce your payment risk.


I always hear about subcontractors not getting paid on time, and unfortunately, this is sometimes inevitable as the industry is fraught with cash flow problems. However, I’ve seen subcontractors give clients an easy excuse not to pay them, and these simple mistakes are adversely affecting their businesses.

Let’s take a look at how to avoid these excuses and some tips to help get you paid on time.

Getting paid on time is at the forefront of all subcontractors’ minds when working with a new client, and we’ve all heard the common excuses as to why the payment has been delayed.

Here are some examples of the simple steps you can take to avoid these excuses:

  • “Your application is late”: Technically, regardless of whether an application is submitted or not, the client is obligated to value your works unless it’s written out in the contract. However, it’s not good practice to send an application in late, so an easy way to avoid this is to request a valuation schedule from the client and set a reminder in your calendar every month so you don’t miss the date.

  • “Your insurances are out of date”: When I was working as a subcontractor, our insurances conveniently expired on the 31st of December – we were due a payment on the 4th or 5th of January and because the insurances had run out, and the absence of staff during the holidays, we didn’t get the updated insurances sent over. What we learnt from this is to send our insurances over to all our clients as soon as we have them.

  • “I haven’t received your application; who did you send it to?” Understanding the stakeholders and who certifies and processes payment is fundamental. Some clients may have a certain procedure, person, or email who processes the applications – if anything is unclear, ask the question to make sure your application doesn’t go “missing in the post”.

  • “I haven’t got your company details; please can you share your company information and UTR number so I can verify you”: This is a simple one; include in all your correspondence your company details and UTR number, go a step further, and on your applications confirm what your CIS deduction is, and this will help speed up the verification and payment process.

    If you’re wondering how to structure your application in this way, don’t worry, I’ve created an application template for you to download for FREE – check it out in the description below.

Now we’ve heard the excuses and how to avoid them, let's take a look at how you can be more proactive and on the front foot when it comes to getting paid.

  • Discount: Main Contractors Discount, also known as MCD, is something that is negotiated or offered during the tender process. You can flip this and call it a “prompt payment discount” and stipulate the terms of the discount being on receipt of timely payment. If the payment is late, you have this in your back pocket to charge additional costs; if the payment is late – you can bet the QS will do as much as they can to get you paid on time to avoid getting charged the additional money.

  • Understanding the stakeholders: Back to stakeholders, it’s important to build that rapport with the relevant people involved in approving and processing your payment. If you appear to be an amicable but a persistent person, they will eventually warm to you and have an open and frank conversation with you if there’s an issue.

  • Get a credit report: Understanding the credit risk of a new client is something every subcontractor should do. If the credit score looks risky, but you’re still keen on working with the client, be open with the prospective client to see if they can help de-risk the project for you; this could be with deposits, stage payments, or material payments. If you’re unsure, ask for a couple of references with their existing supply chain.

  • Communication: Communication throughout the payment process is key to establishing a connection with all the stakeholders and keeping a close eye on the cash coming in. Here are some steps when you send in your first application to a new client:

    • When you issue the application, ask for them to “confirm receipt”
    • Follow it up with a call a day later, to check they’ve received it, and if they want to chat through anything
    • On the due date for the payment notice, drop the client a friendly email asking when to expect the payment notice
    • A week prior to the payment, check in with the client and their accounts to confirm you’re on next weeks payment run
    • The day before the payment is due, do one final check in with the client to confirm the payment is being made
  • Your contractual rights: Payments and cash flow are big contributors to a subcontractor delivering on time, but unfortunately there’s no grounds for an extension of time if a client is repeatedly late on payment, so what can a subcontractor do to protect themselves? Well… the elephant in the room, the one thing the client knows you will try and avoid, and that is give notice that you’re going to pull offsite. This is obviously a last resort, and if you want to learn more about this, check out episode 4 of Own The Build – I’ll leave a link in the description for you.

The Takeaway:

Payments are the life blood of all businesses, especially in construction. Contractors can put simple steps in place to avoid giving clients an easy excuse not to pay.

If a new client looks risky, put measures in place to minimise your risk, and don’t forget to build rapport with all the people involved in processing your payment.

Related resource

Application for payment

Our free template shows you how to structure your application professionally so your client can easily value and certify your payment. This will help you get paid correctly and avoid delays in valuing your claim.