PROPERLY PREPARED STAGE PAYMENTS GIVE YOU A STEADY CASH INJECTION

Stage payments are the way to go. Asking for a payment out of the blue to buy some materials never goes down well with a customer. It either worries them that you’re skint or disorganised. However, asking for payment along the way is perfectly acceptable, in fact it’s good practice, so long as you make it a contractual arrangement.

So if you’ve always wanted to formalise payment for building work as you go along, but have never been sure how to do it, here’s your HBXL quick guide.

• What is a stage payment schedule?
• How does a stage payment work?
• What does a stage payment schedule look like?
• The benefits of staged payments?
• The law and stage payments
• Our software solutions for including stage payments

WHAT IS A STAGE PAYMENT SCHEDULE?

In construction, stage payments or payment schedule or schedule of payments is a list of dates setting out when the builder will make payments to the customer under the terms of the contract agreed between them.

HOW DOES A STAGE PAYMENT WORK?

It depends on the strategy that works best for your business. You can act one of two ways:

• Agreeing with the customer regular intervals and equal payments to get you to the total cost
• Agreeing with the customer to make a payment that relates to each key milestone in the job.

WHAT DOES A STAGED PAYMENT SCHEDULE LOOK LIKE?

It will usually include the following details:

• Starting date for the contract
• Amount to be paid as an initial payment
• Interval of other payments after the initial payment
• Estimated total construction contract amount.

AND THE BENEFITS OF STAGED PAYMENTS?

It’s all about peace of mind and cash flow. You get paid for work and materials as you go along so you’re never out of pocket. It also demonstrates your professionalism to the customer.

By including a stage payment schedule in the contract, setting out who needs to do what and by when, the likelihood of either you or the customer getting dates wrong can be reduced, and so disputes are less likely.

AND HOW DOES THE LAW VIEW STAGE PAYMENTS?

The law loves ‘em! That’s why they form a part of the contractual agreement. If you are in any way interested…The Housing Grants, Construction and Regeneration Act 1996 was introduced with the purpose of ensuring payments are made promptly throughout the supply chain and that disputes are resolved swiftly. Among the provisions included in the Act was the right to be paid in interim, periodic or stage payments. Amendments made in 2011, established that dates for payments must be set out in the construction contract. So there you go.

CONTRACTSXPERT’S ROLE IN STAGED PAYMENTS

ContractsXpert is our software solution to getting paid fairly and squarely. Cowboy customers can’t get one over on you and you’re not left out of pocket.

As far as stage payments are concerned, once you’ve added the cost breakdown of your project into ContractsXpert the software is all set to help you with your billing strategy.

It will automatically produce the breakdown based on your selection of either 1) milestone/build phase or 2) interim payments

There’s more to ContractsXpert than stage payments as you can see here. The software is great value at £199+VAT for an annual subscription or £399+VAT for a lifetime licence. What price peace of mind?

Of course if you have EstimatorXpress, all you need to do is drop the completed estimate file into ContractsXpert. It will then automatically distribute the information, saving you time and reducing any chance of mis-keying in information.

Please note, to sync ContractsXpert 2020 with EstimatorXpress you will need EstimatorXpress 2020.

And on the subject of EstimatorXpress, to really nail your stage payments there’s our…

HBXL STAGE PAYMENTS BONUS PACK

EstimatorXpress has a number of add-ons to make life easier and more productive, including a Stage Payment calculator for £99+VAT (or £55.08+VAT on Annual Subscription).

• Optimises your cash flow on every job
• Generates itemised stage payment reports
• Allows payments to be set up at regular intervals or on reaching milestones
• Gives you the ability to set up bill retentions and a defects liability period
• Fully customisable – schedule the stage payments in line with your needs
• And finally, it produces a detailed cash flow projection showing income and expenditure throughout the job

HBXL INVOICE GENERATOR BONUS PACK

Another add-on is our Invoice Generator. It gives you templates for raising invoices for your customers. You can save them (as a Word document) to then edit with your own details and company logos. The Bonus Pack also allows you to generate credit notes linked to invoices already raised, to a variation or by a custom amount. Use it in conjunction with the Stage Payment Bonus Pack and your scheduled customer payments will create automatic invoices.

Both Bonus Packs require EstimatorXpress 2019 v.10.0.710 and above to run.

Want to hear more about contracts and stage payments? Give the HBXL sales team a call on 0117 916 7898 or your Account Manager on 0117 916 7892.