Sub-Contractors

Protect your sub-contracting business from bad or late paying
contractors or clients.

1 –The architect or the contractor can submit the project via Pay-Trade for mutual protection and full transparency.

2 – All parties agree to the contract and any drawings and the contractor or client pays the full project amount, or initial agreed stage amount (for large projects where perhaps the total amount isn’t available) into the Project Wallet. Once the money clears with the Project Wallet, the project is marked as Work In Progress.

3 – The work is carried out to a completed milestone, valued stage and a payment release is requested either by the sub-contractor or by the appointed architect by way of a valuation certificate. The contractor or client can then review the work carried out and release the amount requested by agreeing to and permitting the release of money from the Project Wallet, or where not happy, raise a dispute for resolution.

4 – Sub-contractors can raise a dispute for clients or contractors who ignore requests to release from the Project Wallet where it has been professionally completed. We will then attempt to contact the client or contractor until releasing payment after 14 days to the sub-contractor ensuring even contractors or clients who hide from payments can’t get away with late payment unless there is a genuine dispute of the work done.

Payments from clients and contractors are so rarely guaranteed. The risk of bad or late payment is a risk that the industry has mainly just had to accept and endure when it goes wrong as a cost of business. This doesn’t need to be the case. Sub-contracting businesses should not have to expose themselves to huge payment risk in the course of their business. The norm needs to change.

A first and sensible step by any professional entity is to ensure all work is carried out to contract. This provides a strong working framework for any project and clarity to all parties. But the value of this contract is based on solvent entities. Where a client or contractor isn’t solvent, or is also chasing payments, or is simply a bad payer who knows the pain involved in chasing payment via the courts, a contract is worth very little without proof of affordability, credit checks and the knowledge there is indeed the intent to pay and promptly.

These highlighted issues can all be resolved by the use of Pay-Trade.

Pay-Trade mitigates the risk of late or bad payment by providing 100% proof of affordability at outset by a deposit by the contractor or client into the regulated project wallet held against a contract (a Pay-Trade contract or a third party uploaded contract) and payments are released from the Project Wallet to the sub-contractor once a milestone, stage or project has been completed.

Retentions can be kept in the Project Wallet for an agreed amount of time post project completion to ensure snagging works and defects are carried out before being paid for.

Variations can be agreed online, adjustments made to increase or decrease the Project Wallet and projects quickly moved back into progress. This ensures all parties remain protected throughout.

This process ensures the sub-contractor is fully protected and the client or contractor has proof of intent to pay and affordability, and ensures the contractor or client does not release money from the Project Wallet until professionally completed work is delivered.

The Pay-Trade system allows for architects acting as contract administrators to create and administer projects. This is in our view a more robust setup as it allows for independent valuations and checks of the work, in addition to any provided by building control.

Where deposits are demanded for cash flow purposes, we at Pay-Trade would urge caution to clients, but remind everyone that construction is an expensive product to deliver, and many smaller but very professional contractors and tradesmen simply don’t have the funds or credit accounts to work entirely in arrears. Where deposits are necessary, we would suggest a credit card payment is used to provide buyers with section 75 protection. This is likely to incur a payment charge but is likely worth it for the peace of mind it provides. All other payments are then made via The Pay-Trade Project Wallet.

Pay-Trade are always looking to innovate and disrupt for the better which is why we can offer our multi layered Project Wallet arrangement where client to contractor to sub-contractor etc payments can be protected under one Project Wallet. Please contact the Pay-Trade team to find out more.