If you're in the construction industry, you'll know that late payments aren't just an inconvenience – they're a genuine threat to your business survival. The construction sector has become notorious for payment delays, and frankly, it's getting worse. But here's the thing: you don't have to accept late payments as just "part of the business." There are proven strategies that can help you get paid on time, every time.

Why Construction Payments Are So Problematic

Let's be honest – construction isn't like other industries. While most businesses work on simple 30-day payment terms, construction projects involve complex supply chain processes, and quite often have 60 or 90 day payment terms thrown into the mix. Add in the fact that you're often dealing with multiple projects, subcontractors, and approval processes, it's easy to see why payments get delayed.

But here's what successful construction businesses have learnt: the key isn't just chasing payments after they're late – it's preventing them from being late in the first place.

Start Strong with Clear Terms

The foundation of good payment practices starts before you even pick up your tools. When you're negotiating that contract, this is your moment to set the rules of the game. Don't just say "payment within 30 days" – be specific. "Payment due within 30 days of invoice date" is much clearer and gives you stronger ground to stand on.

Think about breaking your project into smaller payment chunks too. Instead of waiting until the end of a three-month project to get paid, why not set up weekly or fortnightly progress payments? This keeps cash flowing into your business and reduces the risk of one massive late payment bringing everything to a halt. Plus, if a client is going to have payment problems, you'll find out much sooner rather than later.

And here's something many contractors forget: always include consequences for late payments in your contract. Late payment fees, interest charges, and your right to stop work if payments don't come through. It might feel awkward to discuss, but it's far less awkward than chasing unpaid invoices months later.

Build Relationships That Pay

Strong relationships are actually your best defence against payment problems. When you communicate regularly with your clients, keep them updated on progress, and address concerns quickly, you're building trust. And clients who trust you are far more likely to prioritise your invoices.

Build good relationships with the accounts payable team too. These are the people who actually process your payments, and a good relationship with them can mean the difference between your invoice sitting in a pile for weeks or being processed immediately.

Before taking on new clients, do your homework. A quick check of their payment history, financial stability, and reputation in the industry can save you months of headaches later. If a potential client has a track record of late payments, either walk away or insist on more favourable terms to protect yourself.

Use Technology to Your Advantage

At Bluebells Bookkeeping, we help construction businesses leverage technology to stay on top of their payments. Digital invoicing systems can automatically send reminders, track when invoices are opened, and even escalate overdue accounts without you having to remember to do it.

The best part? Many of these systems integrate with your project management software, so you can tie invoices directly to project milestones. When you complete a phase of work, the invoice goes out automatically. No delays, no forgotten invoices, no excuses.

Know Your Rights and Use Them

The Construction Act gives you powerful tools to get paid, but only if you know how to use them. You have the right to adjudication, statutory payment periods, and formal notice procedures that can dramatically speed up payment disputes. Many contractors don't realise they can suspend work legally if payments don't come through – but you can, and sometimes you should.

Don't wait until you're in financial trouble to learn about these rights. Understand them now, while you're in a strong position, so you can use them confidently if needed.

Keep Your Cash Flow Healthy

Even with the best payment practices, some payments will still be late. That's why successful construction businesses always maintain a cash flow buffer. Whether it's a business overdraft, invoice financing, or simply keeping more cash in reserve, having options means late payments become an inconvenience rather than a crisis.

Consider invoice factoring if cash flow is tight. Yes, you'll pay a fee, but getting 80-90% of your invoice value immediately can be worth it, especially if it means you can take on more profitable work.

Document Everything

In construction, if it's not documented, it didn't happen. Keep detailed records of everything – project progress, changes, communications, and especially anything that might affect payment. That casual conversation about a variation? Follow it up with an email. That delay caused by the client? Document it. This isn't just good practice – it's your insurance policy if payment disputes arise.

When Things Go Wrong

Despite your best efforts, some clients will still pay late. When this happens, act quickly but professionally. A friendly phone call often works better than an angry email, but don't let things slide for too long. The longer you wait to address late payments, the harder they become to collect.

If informal approaches don't work, don't hesitate to use formal procedures. A statutory demand might sound dramatic, but they're a legitimate business tool designed to protect contractors like you.

The Reality Check

Look, avoiding late payments in construction isn't about finding one magic solution – it's about building a system that protects you at every stage. From the moment you quote a job to the final payment, every interaction is an opportunity to either strengthen or weaken your payment position.



The construction industry might have a reputation for late payments, but that doesn't mean you have to accept them. With clear terms, strong relationships, the right technology, and knowledge of your rights, you can build a business that gets paid on time, every time.

If you’re looking for someone to manage your bookkeeping, credit control, subcontractor or supplier payments, look no further. We have years of experience in looking after clients in the construction industry. We can even help with cash flow forecasting so you’re ahead of any cash flow issues you may face.