Responding to research by The Federation of Master Builders (FMB) that revealed fewer than a third of large contractors pay their suppliers within agreed terms, Chief Financial Officer of Colmore Tang Construction Group, Neil Martin, reveals why paying on time delivers better buildings and how subcontractors can help themselves to get paid on time.
“Our philosophy from day one has always been to pay on time because we realise the importance of building relationships and trust with our subcontractors. Building is a collaborative process and we know that the success of our projects, and ultimately our business, is through this teamwork.
“When our subcontractors need to choose between working with us or a late-paying competitor, they choose us. We’re not just buying skills by paying on time, we’re buying goodwill too.
“Our policy is simple – we pay every invoice within the agreed terms. The only exception is when an invoice is incorrect. Our finance and commercial teams work with the supplier to make the necessary amendments and then they go for payment.
“So far, the policy is working well for us. Unlike some contractors, we’re not having to delay payments to enhance our cash flow and because of our structure, and not directly employing any tradespeople, we just pay for what we need and people are happy to come and work for us.
“This year, we were named ‘Best Contractor To Work With (Under £50 million)’ at the Construction Enquirer Awards, which is voted for by subcontractors and suppliers.
“Being fair in business isn’t always held up as being the most highly-regarded principle in this industry, but for us it is and it’s paying dividends. Business is growing, we’re profitable, and we’re delivering some fantastic projects.
“We’re also members of the National Federation of Builders, which has an active policy encouraging all member companies to pay on time. It has also campaigned to the government in support of the Supply Chain Payment Charter, a voluntary code for fair payment in the construction industry.
“I don’t think anyone can accuse us of being a cowboy client and I’d echo the advice of the FMB in recommending that there are contracts and agreed payment schedules between the parties. I’d add to that, make sure your paperwork is as good as your building work, so there aren’t any bureaucratic holdups in processing your payment.”