“Paid on Account” is BS: How Contractors Can Protect Their Cashflow

Getting paid your hard-earned money on a job should be straightforward, right? Well, it turns out, not always. When you’ve put in the elbow grease, tracked every inch of progress, and your QS (Quantity Surveyor) submits your payment claim, hearing “we’ll pay you on account” can feel like a slap in the face. Let’s chat about why it’s time to kick this practice to the curb.

Time to Draw the Line

Imagine you’ve done the legwork. You’ve been to the site, taken measurements, documented everything, and gathered all necessary paperwork. You’ve essentially laid everything out on a silver platter. But then, the bomb drops. “We’ll sort you out on account,” they say. Hold up. It’s time to say, “No thanks!” and here’s why.

QS to QS – Get That Money

First things first, setting aside time for your QS to go toe-to-toe with theirs is crucial. It’s like a tango where both partners are sure they know the steps better. But it’s not about stepping on each other’s toes. 

It’s about finding common ground. Each QS has their viewpoint, but the negotiation leading to agreement is what matters at the end of the day. Having a skilled contractor’s QS on your side will likely lead to an agreement you’re happy with.

Cash Flow is King

Your business’s lifeblood is its cash flow. That sound foreman praising your work? Nice, but it won’t pay the bills. It’s the QS’s nod and the person holding the chequebook – be it the director or the client – that fills your bank.

Anyone else is just noise, pushing you to get the job done without focusing on what you truly deserve. No matter how sound the foreman or site engineer is, neither of them pays you.

If ‘on account’ payments are causing severe cash flow problems and you’re starting to panic, Citizens Information Ireland has a guide on dispute resolution that’s a good starting point.

Getting Paid – The Bottom Line

Let’s cut the crap, shall we?  You put in the hours, the work, the materials…and then you’re supposed to play some waiting game with this “on account” bull?  The hell you will.  It’s about running a damn business, not making friends on-site. This is how it’s supposed to work:

  • Your QS earns their keep. They measure, verify, and make the case for your payment.
  • The QSs work it out. Maybe a bit of back and forth, but that’s normal.
  • You get paid. Because fair pay for a job well done shouldn’t be a damn negotiation.

“On account” can become a dangerous habit. It’s one thing to show some flexibility, but it can’t become the rule—your bills, your workers – your whole business runs on cash, not promises.

Your work on the ground, those hours of toil, are valuable beyond measure. Letting someone tell you they’ll pay “on account” diminishes that value. So, when faced with this, it’s more than okay to push back. Your agreement with the QS and the final nod from those in charge are what truly count. Don’t let anyone undermine your worth. 

Brush up on your payment rights, head to the Construction Industry Federation (CIF) website – they’ve got resources specifically for contractors.

Embrace Negotiation

Both QSs will have their take, and that’s fine. What’s essential is setting aside the time for this negotiation. It’s not just about numbers; it’s about respect, understanding, and, ultimately, ensuring your cash flow doesn’t stutter. Stand firm, make your case, and ensure your payment terms are clear and respected.

Wrapping Up

In the grand scheme of things, getting paid on account seems like a small hiccup. But it’s a symptom of a larger issue – not valuing the hard work contractors put in every day. It’s about time we changed the narrative.

Ensuring your QS puts in a strong payment claim and stands ground during negotiations secures your cash flow and sets a precedent. It tells the industry your work, time, and business are worth every penny. And to anything less, well, it’s time to say “no more.”

Whenever you’re ready, Carroll Estimating can help you manage all your QS work from tender bid to final account.

When you work with us, we become part of your team.

Start building profitably, confidently today with Carroll Estimating.