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Preventing Late Payments in Outsourced Public Sector Work

In further attempts to crack down on late payers in the construction industry, contractors who delay their payments to their subcontractors are at risk of being blocked from bidding for new contracts in the public sector. Since Autumn 2019, public sector procurement departments are assessing whether suppliers on large contracts have implemented processes to ensure subcontractors are paid correctly and on time, in aid to combat this industry-wide issue.

“Fair payment” in the construction industry

Even to this day large contractors are still paying subcontractors inordinately late. Therefore, the Cabinet Office has reinforced Dowden’s statement made in 2018, reminding companies who bid for government contracts over £5m to pay 75 per cent of invoices within 60 days, a watered down percentage from the initial 95 per cent that was instigated.

The new legislation is designed to level the playing field across all the construction businesses, to ensure fairness that will benefit all. With this being said, it is important that contractors look to the future with how they work on their public sector projects, reviewing which systems can ensure a healthy environment for all parties – including digital solutions.

The future of construction: a digital revolution

Proclaimed as one of the construction industry’s biggest trends of 2019, digital solutions are a huge aspect of the industry’s future. Radically improving the day-to-day operations across construction businesses, digital applications are quickly becoming a cornerstone of the industry, making light-work of typically manual processes and improving communication between contractors, subcontractors and suppliers.

WebContractor is a digital solution, designed to help businesses manage their subcontractor Applications for Payment, enhancing visibility and traceability of important documents and invoices. It is evident that digital solutions, such as WebContractor, are the answer to combatting the ongoing late payment issue. Although human-related issues are unavoidable, switching to a digital system which makes payment processes quicker, straightforward and more reliable.

Please contact us if you would like more details on our WebContractor solution.

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