Build UK provides update on late payments in construction
Wednesday 29th March, 2023
Build UK, a trade body representing more than 40% of the construction sector has been tackling the industry’s late payment culture and seen real progress in recent years. According to a Prompt Payment Code blog piece with Jo Fautley, Deputy Chief Executive, Build UK.
In 2018, the enactment of the Government’s Duty to Report Regulations enabled Build UK to begin benchmarking the payment performance of our members and the wider industry. This data, which can be found on the Build UK website has been widely used by the sector and covered in the trade media, leading to significant improvement, particularly amongst Build UK members.
"In 2018, our tier one Contractor members took an average of 45 days to pay invoices, with only 63% of invoices paid within agreed terms. Since then, they have reduced the average time taken to pay invoices to 30 days, which is the expected standard for business.
In addition, 80% of invoices are now paid on time and the percentage of invoices paid within 60 days has increased from 82% to 94%. According to the news item."
Compiling the data in this way has allowed Build UK to present a coherent picture of payment practices within the industry. Whilst this transparency has been uncomfortable for some, it has led to peer pressure among senior leaders of businesses to move up the table. As a result, the majority have put significant effort into transforming their internal systems to improve the efficiency and speed of payments. They have also provided help and guidance to suppliers, predominantly SMEs, on how to submit invoices correctly to ensure prompt payment. The news item added.