We all know getting paid on time is a big deal and not always so straightforward in construction. Your Application for Payment (AFP) is the key to keeping cash flowing. If you don’t know the exact steps involved, here’s a breakdown of what happens during an AFP application and how you can make sure the process works in your favour.
1. Submission of your application
First up, you need to submit your AFP. Sounds simple, but the details matter. Make sure your application is clear, accurate, and backed up with proper documentation. Include everything from progress reports to invoices and photos. Leave no reason for questions, or at least have an answer and some backup ready if they do come so you don’t slow down the process.
2. Review by the opposite party
Once submitted, your client or main contractor reviews your application. They’re checking for accuracy and to make sure everything’s where it should be. If they spot errors or inconsistencies, expect delays. Double-check your figures, make sure your scope aligns with the contract, and get ahead of any potential issues.
3. Negotiation and clarification
Sometimes, your client might challenge parts of your application. Maybe they disagree on the scope of work completed or the costs. Be ready to explain and justify your claim. Stay calm, provide evidence and focus on resolving any disputes quickly. The smoother this step, the faster you’ll get paid.
4. Certification or approval
Once everything is sorted, your application gets approved (or certified). This step can involve third parties like QSs or project managers to verify that the work meets contract standards and that the payment request is justified. Good documentation from the start makes this process faster and hassle-free.
5. Payment release
Finally, the moment you’ve been waiting for. But here’s the thing: there’s often a payment cycle to follow, which can take weeks. Keep communication open and follow up regularly. If payment terms aren’t honoured, address them quickly to avoid cash flow issues.
Tips to Streamline Your AFP Process:
- Always stick to the timelines set in the contract
- Maintain thorough and organised records throughout the project
- Build relationships with key stakeholders for smoother communication
- Use software to automate and track the process
- Don’t hesitate to follow up. Polite persistence pays off
Conclusion
An AFP might feel like a mountain to climb, but it doesn’t have to be. When you know the steps and prepare for every stage, you’re setting yourself up for fewer headaches and faster payments. Get it right, and you’ll keep your cash flow steady and your business growing.
If you need help with getting paid on time, contact us today at Carroll Estimating to find out how our team can support you with everything from tender bid to final account.