How construction firms can deal with late client payments

• Cash flow challenge:  Clients are taking too long to pay, causing delays in paying my suppliers, subcontractors, and staff.

• Perfect for: Construction businesses needing to bridge cash flow gaps caused by delayed payments.

Novuna helps construction firms overcome cash flow challenges caused by late payments, either through our award winning in-house service or by comparing the market to find the best fit for your projects.

We work with providers who understand the payment cycles in construction, help you apply, and ensure you secure the right deal to keep work moving.

Compare providers now Speak to an expert

Why late payments hit construction harder than most

In construction, payment delays can cause an immediate chain reaction: suppliers go unpaid, subcontractors walk off-site, and project timelines suffer. Unlike other sectors, construction often deals with milestone based payments, meaning large sums are tied up for weeks or months.

Practical ways to manage late client payments

1. Tighten your contracts and payment terms: Clearly define payment schedules, late payment penalties, and escalation procedures in every contract. Use clear milestones and staged payments rather than large sums at project completion.
2. Invoice promptly and accurately: Delays in invoicing give clients an excuse to delay payment. Ensure all invoices are sent immediately after work is completed, with all required supporting documents.
3. Use progress billing: Break large jobs into smaller billable stages. This reduces the financial strain if one payment is delayed.
   
4. Implement a structured credit control process: Follow up consistently with overdue accounts, escalating when necessary. This keeps clients aware you take payment seriously.
5. Have a contingency funding option in place: Short-term finance, such as invoice finance or working capital loans, can bridge the gap when payments are overdue, ensuring suppliers and workers are paid on time.

Compare providers now Speak to an expert

Funding options for late payment issues in construction

• Invoice factoring to unlock cash tied up in unpaid invoices
• Invoice discounting for discreet funding while maintaining control of client relationships
• Short-term business loans to cover urgent supplier or payroll costs
• Trade finance to keep materials flowing even during cash flow gaps

How Novuna Business Cash Flow can help

We work with construction firms of all sizes to design cash flow solutions that fit their payment cycles. Whether it’s unlocking funds from unpaid invoices or securing a flexible loan, we help keep projects on schedule and suppliers paid.