Payment practices in the construction industry are not getting better, according to poll

About The Authors

5th March 2021 12:07 - Construction

Payment practices in the construction industry are not getting better: A survey by Construction News and Oracle Construction and Engineering has found that payment practices are not getting better within the industry, with more than three-quarters of respondents (77%) saying that they have stayed the same or have got worse.

The poll of Construction News readers at the end of 2020, had 215 responses and found that for 37%, payment practices have become worse. Nearly three-quarters of businesses (72%) said they typically wait for more than 40 days for their money, while 43% said they are paid within 60 days. Three in 10 respondents said it takes more than 60 days for them to receive payment, while 7% said it takes up to 30 days.

When it comes to settling accounts with their own suppliers, 74% said they pay up in less than 40 days, while 34% said they ensure supply chain payments are made within a month. According to respondents, all invoices are paid within 76 days, with 3% saying it takes 60-65 days.

Digitising payments

The survey also asked respondents about digitising payments within their business, with just a quarter (25%) saying they have digitised or are in the process of digitising their payment processes. More than a third (37%) said they believe digitising payments will be beneficial to their business, however 42% said they don't know enough about it to comment and need to find out more.

When asked about the consequences of late payments for their business, 70% cited wasted time and resources, while 50% said it had a knock-on effect causing delays to outgoing payments, and 45% said it resulted in reduced profit.  Two-fifths said that consequences have included legal disputes or arbitration; 38% have seen delays or stoppages to work, and 37% have seen significant sums lost or written off. Other consequences included being forced to take out loans or landing in debt (23%), redundancies, hiring or pay freezes (17%) and reduced quality of work (12%). Just 6% said there has been no negative impact.

Sign up for free insights from your sector…

Support Us...

We hope that you have found this article useful. This section is freely available for all to use. Please help support it by liking us or following us on our social media platforms:

Share this article...

For updated Construction insights please follow us on @DJS_Construct or use our RSS feed

Other Construction Research Findings

Other Latest Market Research Insights

© DJS Research 2021