Have you ever had to chase payment for work that everyone agreed was needed, and your team has already delivered? It can be frustrating, especially when you thought getting paid would be the straightforward part.
You might expect payment problems to come from poor work or a disagreement over the price. Sometimes they do. But even a project that appears to be running smoothly can have an unpleasant surprise waiting when its time to submit a claim.
Claims, variations and payment schedules rarely get as much attention as the work itself. Yet overlooking them can turn a successful month on the project into a difficult conversation about money.
Problem: Good Work Does Not Automatically Lead to Timely Payment
Your accounting calendar does not match your client’s
Your company’s invoice deadline and your client’s processing deadline may be different. Meeting one does not necessarily mean meeting the other.
For example, suppose your company requires invoices to be issued by the 15th and your client processes them on the 12th. You submit on the 14th. Your accounts team is happy, but the client may already have closed the current run.
That could create an avoidable wait of nearly a month. Whether payment can legally wait that long is a separate question, determined by the contract and applicable law.
Meanwhile, your company still has wages, subcontractors and suppliers to pay. A profitable project can have a cash shortage if the money coming in arrives well after the money going out.
Claims and variations are left until later
When a project gets busy, paperwork is often postponed. Someone asks for extra work, the team gets on with it, and the project manager plans to sort out the variation afterwards.
Unfortunately, afterwards can become several weeks later. By then, the person who requested the change may remember it differently, the costs may be difficult to separate, and the deadline for giving notice may have passed.
A contract may require an initial notice, followed by supporting details within another period. Waiting until you know the exact final cost can therefore be a mistake. Depending on the contract and law, missing a deadline may prejudice or even bar an entitlement. Check the actual requirements rather than assuming a late invoice will fix it.
Month end becomes a scramble
An instruction to submit invoices “at the end of the month” sounds straightforward. But what does that mean in practice?
A contractor might reasonably submit at 5 pm on the final day. The project manager checks it the following morning and forwards it to accounts payable. It is now the next month, and the intended processing window has closed. The client accounts payable team might now treat it as an invoice in that new month and not process it until the end of that month.
The contractor will be chasing payment, you or accounts may be chasing supporting information, and you also need to explain the costs in the monthly report. Are those costs in the new month or the old month. And now you have to accrue it (if you even get that in on time). Nobody benefits from this arrangement.
Solution: Plan the Whole Process from Claim to Payment
Understand what each document is for
Start by making the terminology clear, and remember that different organisations use the same words differently.
For this article, a claim is a request for a contractual entitlement, such as a progress payment, additional costs or extra time. A variation concerns a change to the contracted work. Depending on the contract, the instruction, price proposal, approval and payment claim may be separate documents.
An invoice requests payment, but it does not necessarily satisfy every contractual notice requirement. Nor does a variation approval necessarily mean that an invoice has been submitted or paid.
“Payment schedule” also needs care. It can mean a timetable of instalments or payment milestones. In some construction legislation, it means a formal written response to a payment claim. Those are different functions. Make sure your team knows which meaning applies.
Check the requirements before work starts
Read the payment and variation provisions during project setup. If the bid team negotiated the contract, make sure their handover includes these requirements.
Record at least:
- When progress payments can be claimed and what work qualifies.
- What triggers a variation or delay notice, and when it must be submitted.
- Who must receive notices, claims and invoices, and how they must be sent.
- What evidence, approvals or certificates must accompany them.
- When responses and payments are due.
- Any retention, final claim or release requirements.
Check whether periods are calendar days or business days, and how the contract defines them. Do not assume every deadline runs from the invoice date; the trigger might be receipt, completion of a milestone or awareness of an event. I have even seen some companies treat the start of the payment countdown to be the day the received invoice was internally approved, which could be days or weeks after the invoice was actually received.
Include the practical process in your project management plan (yes, your project does need a project management plan). People should be able to find it without searching through the whole contract each month.
Match invoices to the client’s processing cycle
Ask your client how an invoice actually moves through their organisation. Who checks the work? Who approves the amount? When does accounts need the approved invoice?
In the example above, sending an invoice on the 12th might still be too late if the client’s project manager needs two days to review it. You may need to submit several days earlier.
Work backwards from the processing cut-off and agree a realistic preparation date with your accounts team. If the contract only permits claims on specified dates, respect those dates or formally agree an appropriate change. Do not claim work early simply to fit an accounts run.
Equally, an internal processing calendar does not automatically extend a contractual or statutory payment deadline. If the normal run cannot meet the due date, the paying organisation needs another arrangement.
Agree clear payment stages and evidence
Payment stages should be defined in the contract. They might be monthly progress claims, completed deliverables, measured quantities or clearly described milestones.
Avoid a milestone such as “design substantially complete” without explaining how completion will be assessed. Otherwise, one party may believe payment is due while the other believes significant work remains.
Specify the evidence required, and allow time to prepare it. For example, a design milestone might require submission of the drawing package and its transmittal record. A construction claim might require measured quantities and inspection records.
This connects with my post Submit Deliverables Before Invoicing. Where delivery is a payment requirement, make sure the deliverable reaches the client through the required channel before you claim that milestone.
For broader guidance on setting out these arrangements, business.gov.au explains payment terms. Start there for steps on setting when payment is expected and how the terms are communicated.
Give contractors a workable submission timetable
If you manage contractors or consultants, explain the process at the start. Do not expect them to discover your organisation’s deadlines after their first payment is delayed.
I prefer a clear submission date that leaves time for assessment and approval, rather than a vague instruction to invoice at month end. For example, where the contract and law permit it, a monthly process might look like this:
| Step | Illustrative timing | Responsible person |
| Submit claim and supporting records | By the 25th | Contractor |
| Assess quantities, progress and variations | 26th to 27th | Project team |
| Resolve queries and obtain approval | 28th to 29th | Authorised approver |
| Complete processing | Before month end | Accounts payable |
| Make payment | By the applicable due date | Paying organisation |
These dates illustrate the workflow; they are not standard contract terms. Adjust them for working days, holidays, assessment effort and the actual payment obligations.
Explain how later submissions will be handled, but do not use an administrative cut-off to override payment rights. If a claim must be paid before the next normal run, arrange payment in time. But getting claims in and approved on time helps avoid the annoying paperwork of having to override administrative blockages.
Notify variations promptly and keep the evidence
When a change arises, record the request (preferably in a register), who made it, why it is needed, and how it differs from the agreed scope. Identify the likely cost and time effects.
Seek written approval from the person authorised under the contract before undertaking additional work where required. A technical contact who wants a change may not have authority to approve the expenditure.
If the contract requires an early notice, send it within the required period even when the full impact is still being assessed. State what is known and follow with the required supporting details. An informal discussion should not be assumed to replace a formal notice.
If the contract requires you to proceed on an instruction before valuation is agreed, follow that process and document the position. Emergency work also needs prompt records and the relevant contractual steps.
Keep labour records, quantities, supplier costs, photographs and correspondence linked to the variation. This is another reason to document all changes, variations and agreements. It is much easier to assess a change while the records and people’s memories are current.
Make each claim easy to assess
A reviewer should be able to understand what you are claiming without reconstructing the project history.
Show the contract or purchase order reference, claim period, work completed, relevant milestone or quantity, previous amounts claimed, the amount now requested and the total now claimed. Identify variations separately so they can be traced to their instructions and approvals.
Include the required supporting records and check the calculations before submission. If previous claims were assessed differently from the amounts claimed, reconcile the difference openly. Do not carry it forward in a way that hides an unresolved issue or creates duplicate billing.
Clear claims help the client review the work and plan their own payments. Regular, accurate submissions are usually easier to manage than a large invoice containing several months of forgotten items.
Track deadlines and follow the claim through
Keep a simple register of claims and variations. Record the reference, amount, notice deadline, submission date, response deadline, payment due date, status and responsible person. Link to the supporting documents.
Use reminders before deadlines and nominate someone to act when the usual owner is away. A deadline should not depend on one person’s memory or availability.
Check that the submission reached the required recipient or portal, and retain evidence of delivery. An email in your sent folder may not establish that the contractual submission requirements were met.
Follow up before payment becomes overdue. If a response reduces the amount, record the reasons, check the available response or dispute process, and escalate promptly where necessary. Update the expected cash receipt rather than leaving the original amount and date in the forecast.
Treat incoming claims with the same care
The process works both ways. If you expect your client to deal with your claims promptly, give your contractors the same consideration.
Register incoming claims when received and send them to the right assessor immediately. Raise queries early and arrange an alternate approver if the usual person is unavailable.
Where security of payment legislation applies, an ordinary query email may not satisfy the required response. For example, QBCC guidance on responding to payment requests explains that, for claims covered by Queensland’s BIF Act, a respondent who will not pay the full amount by the due date must provide a payment schedule within 15 business days of receipt, or an earlier contractual period. It must identify the claim, state the proposed payment and give all reasons for any reduction or withholding.
That is a Queensland example, not a deadline for every project. Check the applicable jurisdiction and contract, including how business days are counted. Obtain contract or legal advice where needed, especially when disputing a claim or facing a notice deadline.
Keep the cost report accurate at month end
Earlier submissions can reduce last-minute chasing and some accrual work. However, they do not remove the need to account for work completed after the claim cut-off or work for which no invoice has arrived.
For example, if a contractor claims work through the 25th and continues working until month end, the remaining work may still require an accrual under your organisation’s accounting policies.
Ask the project team for timely estimates and make sure accruals are reconciled when the invoices arrive, so costs are not counted twice. Keep pending variations visible in the forecast, with their uncertainty clearly identified.
The same principle applies to staff hours and expenses, as I discussed in Submit Claims as Soon as Possible. Late cost information can make a project look healthier than it really is.
Lesson: Manage Payment Dates as Part of the Project
I believe project managers should understand the payment process well enough to explain it to their team, their client and their contractors. Leaving everything to accounts creates gaps between the work being done and the money being received or paid.
Know when you can claim, submit the required notices on time, and provide enough information for a proper assessment. Plan around processing cut-offs while meeting the contract and applicable law.
Give contractors clear instructions and assess their claims promptly. Keep the records current so someone else can take over without guessing what has been submitted, approved or paid.
A few clear dates and a consistent process can prevent a lot of chasing. Put them in place at the start, while everyone still has time to follow them.
