Debt recovery in the contracting sector

Why payment stalls in this sector in particular

Late payment in contracting is seldom an outright refusal. The chain usually runs from the employer to the main contractor and then to subcontractors and suppliers, so any stoppage at the top travels downwards. On top of that, entitlement to payment is often tied to certification of the payment application rather than to the invoice date, which means the debtor age recorded in the ledger differs from the age that can actually be defended.

Alongside this sit scope disputes: work that was genuinely carried out but which the other side treats as included in the original price. Claims of that kind need different handling from an amount that was never in dispute.

The documents that make the difference

Assessment of a contracting file normally begins by gathering the contract or letter of award with its annexes; the payment applications submitted and what was certified; taking-over and final acceptance records where they exist; variation orders and any written approvals matching them; site meeting minutes; delay or suspension notices; and a reconciled statement showing what was released and what was withheld.

A signed reconciliation, or a message in which the other side acknowledges a specific balance, changes the position of the file entirely: the discussion moves from whether the amount is owed to when it will be paid.

Retention: when it becomes a claim worth pursuing

Retention is a separate item by its nature, because entitlement to it is normally tied to the contract terms themselves — the completion certificate, expiry of the defects liability or warranty period, and delivery of the required documents. The first step in any retention claim is therefore to read the contract and identify which condition has been satisfied and which has not.

Claiming retention before its contractual condition is met weakens the file rather than helping it, because it hands the other side a ready answer.

Undocumented variations

This is the most frequent source of dispute in the sector: additional work instructed verbally on site, carried out, then refused at settlement. The absence of a signed variation order does not automatically defeat the claim, but it shifts the burden of proof onto other material: e-mail correspondence, site minutes, progress reports, dated photographs, and labour and plant records.

The earlier this material is collected the stronger the file, because retrieving it once the project has closed is far harder.

How we handle a contracting file

We start by reconciling payment applications against payments to establish the real balance, then draw a clear line between what is undisputed and what is contested. That separation matters in practice: it allows the settled portion to be negotiated first instead of holding the whole claim hostage to one disagreement.

We then prepare correspondence or a formal notice setting out the basis of the claim and its components, and follow the negotiation through to a payment schedule that can actually be performed. Where an amicable outcome is not reachable, we explain the appropriate step and coordinate with licensed lawyers or the competent authorities within the scope of our licence.