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Get a full payment schedule written into the contract

Write every payment date for the whole job into the contract: application, due date, notice deadlines and final date for payment. If the contract only gives you a formula, turn it into a dated schedule and get your main contractor to confirm it in writing.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

A formula is only a schedule once someone applies it, and two people often get different dates from it. Your QS counts from the application date and theirs from the due date. One of you forgets a bank holiday. The argument surfaces on the day a notice is due, and one wrong date can be enough to lose a month's payment. Dates written in and agreed leave nothing to argue about.

How to do it

  1. Write out the application date, due date, Payment Notice deadline, Pay Less Notice deadline and final date for payment for the first month.
  2. Roll the same counting forward for every month to the expected end of the job, allowing for bank holidays.
  3. Send the schedule to your main contractor and ask it to confirm the dates in writing, or say where it counts differently.
  4. Have the agreed schedule attached to the contract, or referred to in it, before you sign.
  5. Put every date on the schedule in the diary the day it is agreed.

Example

Illustrative example. The scenario and figures are invented.

The facts

A mechanical subcontractor is about to sign a 14-month contract. The payment terms give only a formula. Applications go in on the last working day of the month, and the due date is 7 days later. The final date for payment is 28 days after that. A Pay Less Notice is due 5 days before the final date.

What happens

  1. The subcontractor's QS turns the formula into a table of five dates for each of the 14 months, and checks it twice.
  2. The table goes to the main contractor's QS with a request to confirm it or mark up any date counted differently.
  3. The main contractor's QS comes back with two months where a bank holiday moves the due date by a day.
  4. The corrected table is agreed by email and referred to in the contract as the payment schedule.

The outcome

All 14 months run with both sides working from the same dates. The two bank holiday corrections are settled before the job starts, not argued about under pressure.

To have this set up for you, see our Late Payment Prevention service.