Construction Cashflow is Sponsored by Know Your Numbers

Click the Following 'Know Your Number's Link' to find out how to unlock financial transformation in your business.

CLICK HERE TO START YOUR FINANCIAL TRANSFORMATION

- Welcome listeners to a new episode of The Construction Cashflow Podcast.

- Today, we're peeling back the layers of Chancellor Jeremy Hunt's Autumn Statement, focusing on the 55-day payment term for government contracts.

- Pose a thought-provoking question: “Is this just a 'wishy-washy' approach by the government, or a step towards real change in the construction industry?”

Key Themes:

1. The 55-Day Payment Rule: More Than Meets the Eye?

  - Chancellor Hunt announces a new rule: Companies bidding for government projects over £5m must prove they pay invoices within 55 days.

  - Discuss the potential impact of this rule on larger versus smaller contractors.

  - Question the real effectiveness of this policy in addressing late payment issues.

2. The Reality of Cash Farming in Construction

  - Highlight how some larger contractors might use extended payment terms strategically.

  - Examine the fine line between managing investments and maintaining ethical payment practices.

  - Reflect on the potential consequences for smaller businesses in the supply chain.

3. Invoice Dates Versus Contract Dates: A Critical Oversight?

  - Delve into the discrepancy between focusing on invoice dates instead of actual contract dates.

  - Explore how this focus might disadvantage smaller trades that rely on regular cash flow.

  - Debate why the Chancellor’s statement might miss addressing this crucial aspect.

4. Navigating Late Payments: Strategies for Contractors

  - Offer practical advice for contractors on how to safeguard against late payments.

  - Discuss the importance of understanding contract terms and effective financial planning.

  - Encourage contractors to proactively manage their invoicing and payment follow-ups.

5. Critique of the Chancellor's Statement:

- Challenge the limited scope of the 55-day rule and its effectiveness for smaller contracts.

- Question the lack of a more robust legislative approach to ensure fair payment practices.

- Criticise the statement for not covering contracts under £5m, potentially overlooking a significant part of the industry.

Hosted on Acast. See acast.com/privacy for more information.

Construction Cashflow is Sponsored by Know Your Numbers

Click the Following 'Know Your Number's Link' to find out how you can unlock financial transformation in your business.

CLICK HERE TO START YOUR FINANCIAL TRANSFORMATION

Episode Summary

In this episode, Stu Davidson discusses how specialist subcontractors and suppliers can protect themselves from late payments, retentions, and complex payment terms.

Stu recommends the following:

• Do your due diligence on the main contractor or tier one that you're working for. Talk to other specialists to see if they get paid on time, check out the contractor's credit rating, and make sure you understand the payment terms.
• Have your own terms and conditions in place. These should align with your values and business needs. Don't be afraid to negotiate with the main contractor on things like retention periods and payment terms.
• Make sure you're submitting your applications correctly. This includes submitting them on time, to the right person, and in the correct format.
• Keep good records. This will help you support your applications and make it easier for the main contractor's QS to assess them.
• Late payments are still a major problem in the construction industry. 68% of payments are late, costing the industry £11.4 billion.
• Specialist subcontractors and suppliers are often the most vulnerable to late payments.
• There are a number of things that specialist subcontractors and suppliers can do to protect themselves from late payments.
• Doing your due diligence on the main contractor, having your own terms and conditions in place, submitting your applications correctly, and keeping good records can all help to reduce the risk of late payments.
• Using a PVA tracker can also be a helpful way to keep track of your progress and applications.
• 
  

By following these tips, specialist subcontractors and suppliers can increase their chances of getting paid on time and protect their businesses from financial risk.

Hosted on Acast. See acast.com/privacy for more information.

Construction Cashflow is Sponsored by Know Your Numbers

Click the Following 'Know Your Number's Link' to find out how you can unlock financial transformation in your business.

CLICK HERE TO START YOUR FINANCIAL TRANSFORMATION

Episode Title: Vistry's 10% Cut: How to Negotiate as a Specialist Contractor

Host: Stu Davidson

Summary: Vistry's recent demand for a 10% cut from its suppliers has caused ripples in the construction industry. In this episode, Stu Davidson discusses how specialist contractors can negotiate effectively in response to this demand.

Key Points:

• Stay calm and don't react impulsively.
• Request a face-to-face discussion with Vistry.
• Believe in yourself and understand your worth.
• Know your numbers and set boundaries.
• Consider consulting with experts.
• Be prepared to walk away from the deal if necessary.
• 
  

Additional Thoughts:

• Don't be afraid to collaborate with other suppliers.
• Be prepared to stand your ground and walk away if necessary.
• Remember that you're not alone.
• 
  

Episode Resources:

• Previous episodes of The Construction Cashflow Podcast
• Experts such as Yosof Yewing (episode 16), Sean Bradley (episode 17), Carly Thorpe (episode 26), Craig Alexander Rattray (episode 36), Paul McDevitt (episode 27), Tracey Westell (episode 41), and Joe Lynch (episode 32)

Call to Action:

Stand up for your rights and don't accept unfair demands from Vistry. Join the growing movement of suppliers who are fighting for a fairer deal.

Hosted on Acast. See acast.com/privacy for more information.