How can you ensure subcontractors and suppliers are paid fairly and on time in construction?

Get them to pay for your services up front for fixed fee invoices. For ongoing services, do not do anymore work until you are paid for the work you have completed.

Ensure clear payment terms, prompt invoicing, regular communication, use payment certifications, streamline approval processes, document work promptly, release retentions on time, adhere to payment schedules, establish fair dispute resolution, monitor project finances, and verify compliance with contractual obligations.

Automate progress recording in real time Automate contractor billing by integrating with all the departments like store, safety, quality control, administration etc. Integrated billing system in web based and mobile module so that contractor can certify without visiting the office.

-We need to ensure that the BOQ is transparent and detailed so that the work done by the contractor/ subcontractor is adequately understood and covered for payment. -The time lines defined for release of 80% immediately after submission of IPC and balance accordingly so that working capital is ensured to the grass root agencies working down the line.

25 years ago I worked at the local chapter of a contractors association, where the most attended training program we did was called "Do You Know What You Just Signed?" it was presented by an attorney who did lots of construction contracts. The issue at hand was how many subs never read the really fine print. A contract is not something to don't negotiate and understand going in, but sadly that was the issue with most of the attendees.

Sub Contractors and suppliers should ensure they submit accurate and timely invoices so that the consultants have enough time to verify and process the payment.

During the project initiation, clearly outline the milestones for payment, including due dates, invoicing procedures, and any penalties or bonuses related to timely payments.

Tracking progress is independent of invoices because the Contract has already set forth the quality management system. So, the payment should be linked to work done in accordance with the Contract and quality requirements which are confirmed by testing

Some other important aspects to consider while verifying work is to ensure that all the Guarantees and Bonds regarding performance of the Contractor are still binding otherwise the payment shall not be made as a basic rudiment of contract is missing

Arbitration is time saving but the old school culture in countries like Pakistan have had more harm than good as Arbitration awards are challenged taking it back to the first step i.e. litigation. Hence, there is a need to ensure that Arbitrator or DAB award is final and binding

Avoiding the feeling that someone wronged you & taking the precautionary steps towards financial security for your company. "Didn't you read the contract!?" Any company preforming work should discuss & sign payment terms & scheduling prior to any starting date. It is a rough day when a Subcontractor comes to collect their checks & are told "I'm waiting on payment myself, they were supposed to pay us last month" Know & discuss prior to bid approval the payment dates, the tremendous difference between a Net 30 & Net 90 make & break companies every year.

The key to timely business transactions lies in the efficiency of documentation - such as purchase orders and sub-contracts, both of which should stipulate payment terms. Project managers should meet with bookkeepers to ensure that resources are being timely paid. Project managers must reconcile invoices with the level of product or service provided, such that they are paid for work or product in place - no more, no less. Developing a fluid relationship with ownerships AP department can streamline the process and obviate a lot of the conflict that arises from disputes.

I find that delays to the requisition process can often be attributed to mistakes in the payment app, or extended negotiation over values. Therefore, ensure that trades issue accurate payment applications, and that a streamlined pencil req to approval has been coordinated with ownership.

One way to ensure that subcontractors and suppliers are paid in a timely and fair manner is by implementing a clear and transparent payment system. This can include setting clear payment terms and deadlines, regularly communicating with subcontractors and suppliers about payment statuses, and having a system in place for resolving any payment disputes. Additionally, conducting regular audits and evaluations of payment processes can help identify any issues and ensure that all parties are being paid fairly and on time.