Late payments in the construction industry
Monday 3rd September 2018
The issue of late payments has raised its head again in the construction industry following accusations that collapsed subcontractor Vaughan Engineering has been using Carillion’s liquidation as a ‘smokescreen’ to hide its own poor payment record.
Whilst clearly a concern, this trend reflects that pressures that construction companies are facing. Balancing cash flow, project management and delivery, resource planning and skills acquisition is no easy task in any climate, but with the added pressures of rising material costs and the continued uncertainty of what Brexit will actually mean, subcontractors have been amongst the first to suffer.
Our construction partner Anjon Mallik has responded to the issue, with an extended comment piece in Construction News, He said:
“News that construction companies are using the fallout from Carillion as a smoke screen for not paying their own contractors reflects the pressures they are facing.
“Margins remain tights and the continued uncertainty of what Brexit will actually look like means cash is getting squeezed. Legislation is there to help businesses get paid on time but it’s vital that internal credit control processes don’t delay in taking action before it’s too late.”
Visist Construction News to read more Anjon’s comment piece on the issue of late payments in the construction industry.