44
DECEMBER 2014 PRO INSTALLER
PRO BUSINESS
www.proinstaller.co.uk
Late payment still
plagues half of all
subcontractors
Late payment is still rife within the supply chain with more
than four in ten specialist contractors and small builders
suffering delays, according to a new industry survey.
Despite Government
efforts to clampdown
on the problem, tier
2 and 3 contractors
are still being left to
effectively bankroll
the industry because
they must pay their
suppliers on time even
though their clients
are late.
Construction trade bodies,
the National Specialist Contractors Council and Federation of Master Builders,
have conducted the most
in depth survey into late
payment since the uplift in
construction activity.
Late payment and the
abuse of cash retentions
remains a serious issue for
the whole industry even
with recovering workloads
and a backdrop of specialist contractors gaining the
upper hand in what work
they take on.
The survey of over 700
firms found 92% had contractual terms of 45 days,
but just 57% were actually
paid on time.
Charging interest on late
payment in accordance
with the Late Payment of
Commercial Debts Regulations is currently not
perceived as an effective
mechanism with only 5%
of firms resorting to using
it for late payments.
The survey also found
that firms were on average
having to write off 12% of
withheld cash retentions
as bad debt.
Taken together bad debt
now equates to an average
1% of turnover, which
amounted to a loss of
£177m to NSCC and FMB
members in the financial
year.
Suzannah Nichols, chief
executive of the NSCC,
said: “Firms are struggling
to invest in future development because of late
payment.”
She added: “There is a
big positive from these
findings. Most firms now
have contractual payment
terms of 45 days. This
means we now have widespread recognition of the
need to improve payment
terms, the challenge is to
get firms to deliver.”
The new Construction
Supply Chain Payment
Charter, being promoted
by Government maintains the commitment to
payment within 30 days on
public sector projects and
specifies payment within
45 days on private sector
projects by next June. The
target is to move to 30
days on private work from
January 2018.
Nichols added: “This research shows it is not such
a big ask to get clients and
main contractors to agree
to 30 days by 2018.”
At present, around £439m
is estimated to be withheld
in retentions from all NSCC
and FMB members. Around
£200m of this, or more
than 45%, is being withheld
beyond the agreed contractual terms and is overdue
for release.
Source: Construction
Enquirer
The Door and Window Centre
rejoins Network VEKA
A Network VEKA member that investigated how its
business would fare without the organisation’s support has
returned to the Network fold, praising its many benefits for
customer relationships and business development.
Network VEKA was established in response to an
industry beset by bad reputations and disreputable
operators. Its aim to consistently provide high standards
of customer satisfaction
through an elite group of
strictly-policed member
companies has remained
staunchly unchanged since
its advent in 1996.
Pictured L - R: Christina Critcher, Matt
Bettles, Antony Bettles, David Sinfield
Window Centre for its decision to
rejoin though, alongside professional advert design and an online
price engine, part of Network
VEKA’s Web Tools package.
A family business, established
by two brothers-in-law in 1989,
The Door and Window Centre has
always relied on word-of-mouth
referrals for the majority of its
business, receiving an estimated
90% of its trade this way. Network
VEKA’s support in marketing
efforts was still one of several
reasons cited by The Door and
David Sinfield, Director at The
Door and Window Centre, explains: “The ability of customers to
instantly access a ballpark figure
for the installation they’re interested in, be it doors, windows or a
conservatory, has been particularly
useful. The price engine simply
requires customers to input the
dimensions of the job they have
‘instantly access a
ballpark figure for
the installation’
planned, and then presents them
with three approximate prices,
convergent with the different
grades of materials we use.”
The company, based in Swanley,
Kent, strongly values the reassurance, trust and peace of mind that
customers place in the Network
VEKA name, and how using the
Network’s logo, alongside its own,
helps to boost perception of The
Door and Window Centre brand.
David continues: “Our customers
really value Network VEKA’s insurance-backed guarantees. Network
VEKA has been doing this for
a long time and, as far as we’re
concerned, they’ve got the formula
just right.”
For more information visit
www.networkveka.co.uk