FAQs for Payments, Quantity Surveying

Question 1

What is the difference between a payment application and an invoice?

Accepted Answer

An invoice asks to be paid an agreed amount; an application asserts a valuation under the contract's payment machinery, and the machinery is what gives it teeth. An invoice is a request for payment of a sum already settled: the price is agreed, here is the bill. A payment application is more muscular. Under a construction contract, and the Construction Act behind it, the application is your periodic assertion of what the works are worth at a given date, set into a machinery of dates and notices the paying side must operate correctly. Once a valid application is in, the payer owes a response in a defined window: a Payment Notice stating what they will pay and its basis, and, if they mean to pay less, a Pay Less Notice by its own deadline. Fail to operate that machinery and the application itself can fix the sum due, payable in full, however generous its numbers. So an invoice at the wrong time earns nothing but a queue position, while a proper application, on the right date in the right form, is a legal position with a clock running on the other side. The rule: know which regime your contract runs, apply on its dates in its form, and treat the application as the formal document it is, because the protections attach to the machinery, not the politeness of the request.

Question 2

What evidence should sit behind a payment application?

Accepted Answer

Enough for the assessor to certify each line without leaving their desk: measures against the pricing document, dated photos, tickets and the variation record, referenced line by line. The test is practical: the assessor should be able to certify each line without leaving their desk or taking your word for anything. So the application carries its measure against the pricing document, every progress claim pointing at the items and rates it draws on; dated photographs that place the work, wide enough to show which plot or level, close enough to show it done; delivery tickets and invoices behind materials claims, on site and, where the contract allows, off it; signed daywork sheets behind daywork; and the variation record behind every variation line, the instruction or confirmation of it, with your current assessment where the price is not yet agreed. Two disciplines multiply the value. Attach evidence to the line it proves rather than in a heap at the back: assessors certify what is easy to certify. And keep the cumulative story reconciled, because an application whose March and April cannot both be true invites the assessor to distrust May. None of this is about volume. Ten well-placed records beat two hundred loose photographs, and the application that consistently proves its lines trains the other side to stop cutting them.

Question 3

Can I claim for materials on site before they are fixed?

Accepted Answer

Usually yes, most contracts allow materials properly on site to be claimed before they are installed, but only within the clause's conditions and only with the delivery evidence attached. Most standard forms do allow materials and goods delivered to and stored on the site to be included in an interim payment before they are fixed, because otherwise a subcontractor would carry the cost of everything bought ahead of installation, which on a materials-heavy trade is a great deal of cash. But the entitlement lives inside conditions, and the conditions are the whole point. The materials generally have to be actually on the site, not merely ordered or in transit; intended for the works, properly stored and protected, and not brought on prematurely or unreasonably; and the claim has to be evidenced, tied to delivery tickets and to the works the material belongs to. Meet the conditions and the money arrives in the next application rather than at installation. Miss them and the line gets cut, sometimes with a suspicion that spreads to the honest lines around it. Two cautions. Once fixed, the material should move from the materials line into the measured work rather than being claimed twice, so reconcile installed against claimed each month. And the paying side often insists on seeing the material and its storage before certifying, so make it easy to inspect and keep the tickets filed against the claim. Claimed properly, on-site materials turn cash tied up in a compound into cash moving through the account.

Question 4

Can I claim for materials stored off site?

Accepted Answer

Sometimes, but only where the contract expressly allows it and only when ownership, identification, separation and insurance can all be proved, because off-site materials are exactly what gets tested. Off-site materials are a stricter question than materials on site, and the first thing to establish is whether your contract permits the claim at all, because many do not without a specific listing or agreement, and amendments frequently tighten or remove the entitlement. Where a form does allow it, the conditions exist for a reason: paying for something you cannot see, in someone else's premises, risks the money buying nothing if the supplier fails or the goods are not actually yours. Typically the goods must be identifiable as intended for this contract, set apart and marked from other stock; ownership must have passed to you or pass on payment, evidenced by a vesting certificate or transfer documentation; and they must be insured against loss or damage while stored. Some forms also require the goods on a listed schedule agreed in advance and may ask for a bond. So an off-site claim is only worth making if the vesting pack is assembled before it goes in, not scrambled together after it is queried, because a claim that cannot survive testing is an invitation to a cut, or a payment clawed back later when a supplier goes unpaid. Get the pack right and the cash comes forward months; get it wrong and you have paid for a risk the contract wrote its conditions to keep off your books.

Question 5

How do I check a payment certificate is right?

Accepted Answer

Check the notice before the number: was it in time, in form, with the basis stated; then reconcile it line by line against your application and answer the cuts in writing. Check the document before the arithmetic. A Payment Notice or certificate has jobs to do under the contract and the Act: it must arrive inside its window, state the sum the payer considers due, and show the basis on which that sum is calculated. A certificate that is late, or offers a bare figure with no basis, may not be a valid notice at all, and that changes what you are owed regardless of its content, so establish validity first, with the contract open. Then reconcile it against your application line by line, not total against total, because one overall number can hide offsetting movements, a fair assessment of measured work masking an unexplained deletion of a variation. Sort the differences into three piles: cuts you accept, cuts the records can answer, and cuts with no stated reason, which deserve a pointed question, since the obligation to show a basis exists precisely so sums cannot be shaved namelessly. Finally, answer inside the cycle. A short written response, line, amount, why the cut is wrong, sent while that certificate's cycle is open, keeps the difference alive; a year of unanswered certificates reads, at the final account, like a year of agreements.

Question 6

Small amounts get shaved off every certificate. Is that just normal?

Accepted Answer

It is common, but it is not neutral: unanswered small cuts compound into the account's biggest number and read later as agreement, so each one deserves a short written answer. It is common enough that many contractors budget for it, which is exactly why it persists. But normal is doing a lot of work in that sentence. A pattern of small cuts is one of three things. Honest conservatism: the assessor certifies what the evidence proves, and thin applications leave room for doubt, so the cure is better substantiation, not complaint. Process: a valuation done in a hurry, rolled forward from last month, correcting itself only when someone pushes, so a polite written query each cycle does the correcting. Or policy, a percentage quietly held back everywhere because most subcontractors are too busy or too polite to reconcile line by line, so silence is what it relies on. In every case the response is the same: reconcile each certificate against the application, answer each unjustified cut in writing inside its cycle, and re-present unresolved sums in the next application so the account carries them forward as live. The compounding matters more than any single month: modest shavings across a long job add up to the largest single difference on the final account, and a year of silence is the other side's best exhibit that the shavings were agreed. You do not need heat, you need a paper trail that says, every month, we saw it and we did not agree.

Question 7

What actually happens if I miss an application date?

Accepted Answer

Usually you wait a full cycle for money you needed this one; on some contracts the window matters so much that a late application counts for nothing at all. It depends on the contract's machinery, and the range runs from annoying to expensive. Commonly the application just misses its slot in this cycle, so the sums wait a month, which on a cash-hungry job can be the difference between paying the supply chain comfortably and not. Sharper contracts make it worse. Some say applications must be made on, or within so many days of, a stated date, and treat anything outside the window as ineffective: no application, no Due Date arising from it, nothing for the payment machinery to bite on until next time. Amended forms sometimes tighten this further, and the amendments are where such traps live. What a missed date rarely does is extinguish the underlying entitlement: the work was still done and its value does not evaporate, it queues. But cashflow is the point of the regime, and a pattern of late applications also does quieter damage, teaching the paying side that your account runs loose and inviting the casual assessment loose accounts get. The cure is unglamorous: the cycle mapped once from the contract, every date diarised to a named person with a deputy for holidays, and the application built during the month rather than on the night it is due, so the date is an administrative step rather than a monthly emergency.

Question 8

How should I assess a subcontractor's application?

Accepted Answer

Value what is actually there, from the site's own records, state your reasons for every difference, and serve the notices that make your assessment lawful, in their windows. Assess it the way you wish your own applications were assessed: from evidence, with reasons, on time. Value the works against the subcontract's pricing document from what the site actually shows, the walk, the progress records, the delivery tickets, rather than starting from the application and knocking a percentage off, which is indefensible in both directions: it overpays what is not there and undercuts what is. Where your number differs, state the reason line by line: not certified, not complete, no evidence of the materials, plus the calculation. Reasons are not a courtesy; they make your assessment an assessment rather than an arbitrary discount, and they are what a Pay Less Notice needs anyway if the difference hardens. Then operate the machinery: the Payment Notice inside its window saying what you will pay and its basis, and, where you intend to pay less than a Notified Sum, the Pay Less Notice by its own deadline with the figures behind it. Under the Act an application you fail to answer in time can become payable in full, right or wrong, which turns notice administration into the cheapest risk management a main contractor does. The assessment that is fair, evidenced and on time survives adjudication, keeps a good subcontractor solvent mid-job, and costs the least over the life of the account.

Question 9

When do retention releases actually fall due?

Accepted Answer

Usually half on practical completion and the rest after defects are made good, but the triggers are events needing certificates, and in practice nothing moves until you apply. The standard shape releases retention in two steps: the first half at practical completion, the second when the defects arising in the rectification period have been made good, each evidenced by a certificate. But the operative words are the contract's own, and three truths decide whether the money moves. First, the triggers are events, not dates: the release is opened by the certificate of practical completion or of making good, so if the certificate is late or nobody has asked for it, the release has not legally begun, and chasing the certificate is chasing the money. Second, subcontract retention often hangs off the main contract's events, releases tied to practical completion of the main works rather than the subcontract works, which can lawfully hold a subcontractor's money long after their own trade finished; know which regime your contract runs. Third, and decisive in practice: releases are almost never volunteered. The sums sit as credits in someone else's ledger, the account is closed, and the paying side has no diary entry for your money. The parties who collect reliably keep a register of every sum held, its trigger and its forecast date, apply on the day the certificate lands and chase on a rhythm until it is paid. The entitlement is usually clean; what is missing is the asking.

Question 10

What does a retained QS actually do for me each month?

Accepted Answer

The commercial cycle, run to the contract: the application in on its date, the notices checked and answered, the deadlines watched, the registers current, reported briefly each month. The month has a shape, and the service runs it. Early in the cycle the payment application is built from the records and submitted on the contract's date, in its form. As the paying side responds, each notice and certificate is checked for validity and reconciled against the application, with a short note on what to accept and what to answer, and the answers drafted. Through the month the registers stay current: variations priced in as agreed, deadlines and notice windows watched with flags to a named person while there is time to act, retention deductions checked and releases applied for as their triggers land, and, where you carry subcontractors, their applications assessed and their notices prepared inside their own windows. It closes with a short report: the account's position, what was applied for and certified, what is open, what falls due next month. Unlike employing someone, it is bought per project, monthly, at a fixed fee, scaling with the workload rather than a headcount decision, and stopping at the end of any month the job no longer needs it. Unlike doing it yourself in the evenings, it stops the things going wrong: the missed dates, the unanswered cuts, the unpriced variations and the forgotten retention that were never anyone's actual job.

Question 11

What if my contract runs on invoices rather than applications?

Accepted Answer

Then the invoice is the document that starts the payment clock, so it inherits all the discipline an application would carry: right form, right date, right references, tracked to its final date for payment. Plenty of construction work is bought on terms that never mention applications: the order says invoice monthly, or on delivery, or against milestones. What changes is which document operates the payment machinery, not whether there is one. Where the work is a construction operation, the Construction Act still requires an adequate payment mechanism, filled in by the Scheme for Construction Contracts where the contract is silent, so the invoice still carries dates: a Due Date, a Final Date For Payment, and notice obligations on the payer if they mean to pay less than the sum claimed. The consequences are three. The invoice starts the clock, so a late invoice is self-inflicted late payment: send it the day the entitlement arises, not when the office next has a quiet afternoon. It must be right first time, the purchase order quoted, the entity correct, the breakdown matching what was agreed, because a bounced invoice restarts the queue rather than the law. And track each invoice to its Final Date For Payment, because on invoice-led terms nobody sends you a certificate to disagree with; silence looks like acceptance right up until the money fails to arrive. Know which regime the contract runs before the first bill: some orders are hybrids, applications for the measured work and invoices for the rest, and the protections attach to operating the right document on the right date.

Question 12

Which notices do I owe my subcontractors each month?

Accepted Answer

Normally a payment notice against each application, stating the sum you will pay and its basis, and a pay less notice by its own later deadline if you mean to pay less; miss both and the application's own sum falls due in full. The exact regime lives in each subcontract, the first thing to check, because amended forms move the windows and the statutory defaults only apply where the paperwork is silent. The standard shape under the Construction Act: each cycle you must serve a Payment Notice stating the sum you consider due and its basis, and, if you later intend to pay less, a Pay Less Notice by its own, later deadline, again stating the sum and its basis. Two failures dominate. First, silence: no Payment Notice, no Pay Less Notice, and the subcontractor's application becomes the Notified Sum, payable in full by the Final Date For Payment, however optimistic its arithmetic, and an adjudicator will enforce that without examining the merits. Second, the notice that exists but does not work: served outside its window, or in a covering email that never states a basis, or netting off a contra-charge no paperwork supports. It fails exactly when it is needed. The discipline that avoids both is unexciting: one calendar of every account's windows, each notice drafted before its date in the required form, reasons stated so they could be read out loud, service by the route the subcontract demands, and proof kept. Main contractors who run that discipline stop paying for other people's arithmetic; the ones who do not are, sooner or later, made to.