Insist on 30-Day Payment Terms

Payment within 30 days is a contractual requirement on central Government contracts and a number of other clients such as Crossrail and Network Rail are increasingly insisting on payment within 30 days. 30 days is now recognised as best practice within the construction industry and you should always insist on 30-day payment terms within your contract.

Establish 30 Days

In simple terms, 30-day payment means that you receive your money not more than 30 days after the end of a valuation period, which is typically at the end of a calendar month.

To achieve this in accordance with the payment provisions of the Local Democracy, Economic Development and Construction Act (the 'Construction Act'), make sure the first 'Due Date' is not more than 30 days after the date that you start work. The Final Date for Payment (the date on which payment should actually be received) should then be not more than 30 days from the Due Date. The best way of getting the dates right is to include a schedule of calendar dates in your contract, which establish the key dates in the payment process for each month.

Beware Misleading Terms

Look out for 'standard' terms which imply 30-day payment but are really anything but! Such clauses extend the periods between the key payment dates to give the impression that the payment terms are more favourable than they really are. Always check that 30 days means 30 days.