News
Friday 12th June 2026
How to survive the late payments crisis
The UK construction industry is under mounting strain with 70% of companies experiencing late payments from customers in the past 12 months, according to research by Lopay, a partner of the National Federation of Builders.
Impacted companies are left financially unstable and unable to take on new projects, invest in new equipment or pay for staff training. Ultimately late payments can lead to reduced profit margins, cashflow problems and insolvency.
Adding to this pressure is the related cost of chasing late payments. Data from Chaser’s 2022 Late Payment Report shows about 30% of all construction businesses spend more than seven hours a week trying to get customers to pay up. Worrying, 40% of tradespeople believe the situation has grown worse over the past five years.
Chaser recommends businesses take the following actions to protect themselves:
Review your credit control process
All staff should understand and stick to a robust credit control policy. Review yours regularly to identify any problem areas.
Write contracts clearly
Contracts must be worded clearly and include your payment terms with realistic deadlines. Any changes to the terms of the contract should be agreed in writing by both parties.
Consider incentivising early payments by offering discounts for customers who pay on time and charges for customers who are late.
Communicate regularly
Remind customers of their payment deadlines and keep a record of all communication.
Discuss any problems openly with your customer and try to reach an agreement on a realistic payment plan or deadline extension. Remain professional because becoming confrontational will make the situation worse.
Ask for a deposit
Many smaller construction firms shy away from asking for a deposit, fearing they will scare off potential customers. But requesting a deposit when the contract is signed guarantees that you will be paid at least part of your fee before starting work.
You could also ask for part-payments throughout the job, such as half or two-thirds of the total fee at project milestones.
Always follow up
Be polite but firm when chasing customers for payment. Send reminders before the payment is due and follow up with a phone call or email if they haven’t replied.
Use technology
Most smaller businesses don’t have the resources to devote time and staff to chase up payments proactively, but technology can make the job easier. By automating tasks such as payment reminders and tracking invoices, you can save time and minimise the risk of late payments slipping through the cracks.
Call in the professionals
If you cannot come to an agreement with your customer, you may need to take legal action. Seek advice from an accredited debt collection agency that will work to find a mutually beneficial solution.
Following these simple steps will help ensure that you are always paid on time for the work that you have done. This will help relieve the stress of managing cashflow and help you stay on top of your finances.