Invoicing in the construction industry
An invoice is a document issued by a vendor to a purchaser, setting out the products or services that they have purchased (or have agreed to purchase) and the amount that is payable. Invoices can be sent before or after the delivery of products or services, and typically include a payment due date. An invoice can also be sent after a purchase order has been agreed.
Once it has been agreed, an invoice is a legally-binding document, detailing a debt owed by the purchaser to the vendor.
The information set out on an invoice will typically include:
- Date that the invoice was created.
- Names and addresses of customer and supplier.
- Description of items or services purchased.
- Prices and any added VAT.
- Terms of payment (i.e. how long the purchaser has to pay the invoice).
- Payment method (such as bank account details).
Late payment of invoices is a problem for most suppliers of goods and services. In tough economic times the problem gets worse as cash retention becomes a greater priority. In the construction industry squeezing sub-contractors and suppliers is almost 'accepted practice'. A survey of 250 small construction companies in November 2012 found that 97% felt unfairly treated by main contractors, and just 5% of all work was paid for within 30 days.
However all suppliers of services have statutory rights as well as those provided by contract. These include:
- The Late Payment of Commercial Debts (Interest) Act
- The Late Payment of Commercial Debts Regulations
- The Housing Grants, Construction and Regeneration Act
- Small Business, Enterprise and Employment Bill
For more information see: Late payment.
According to data from online invoicing firm Tungsten, published in April 2016, UK construction businesses are losing more than £1.8bn from invoice fraud each year. Fraudsters use tactics such as; embedding viruses in email attachments, attaching unknown invoices to an email or via post, making false changes to bank details and sending duplicate invoices.
For more information see: Construction invoice fraud.
[edit] Related articles on Designing Buildings Wiki
- Accounting.
- Construction invoice fraud.
- Construction supply chain payment charter.
- Difference between purchase order and invoice.
- Fees.
- Late payment.
- Letter of intent.
- Purchase order.
- Record keeping.
- Regular invoicing for architects.
- Subcontractor vs supplier.
- Supply chain.
- The benefits of e-procurement in construction.
- Turnover.
Featured articles and news
Buildings that changed the future of architecture. Book review.
The Sustainability Pathfinder© Handbook
Built environment agency launches free Pathfinder© tool to help businesses progress sustainability strategies.
Government outcome to the late payment consultation, ECA reacts.
IHBC 2025 Gus Astley Student Award winners
Work on the role of hewing in UK historic conservation a win for Jack Parker of Oxford Brookes University.
Future Homes Building Standards and plug-in solar
Parts F and L amendments, the availability of solar panels and industry responses.
How later living housing can help solve the housing crisis
Unlocking homes, unlocking lives.
Preparing safety case reports for HRBs under the BSA
A new practical guide to preparing structural inputs for safety cases and safety case reports published by IStructE.
Male construction workers and prostate cancer
CIOB and Prostate Cancer UK encourage awareness of prostate cancer risks, and what to do about it.
The changed R&D tax landscape for Architects
Specialist gives a recap on tax changes for Research and Development, via the ACA newsletter.
Structured product data as a competitive advantage
NBS explain why accessible product data that works across digital systems is key.
Welsh retrofit workforce assessment
Welsh Government report confirms Wales faces major electrical skills shortage, warns ECA.
A now architectural practice looks back at its concept project for a sustainable oceanic settlement 25 years on.
Copyright and Artificial Intelligence
Government report and back track on copyright opt out for AI training but no clear preferred alternative as yet.
Embedding AI tools into architectural education
Beyond the render: LMU share how student led research is shaping the future of visualisation workflows.
Why document control still fails UK construction projects
A Chartered Quantity Surveyor explains what needs to change and how.
Inspiration for a new 2026 wave of Irish construction professionals.
New planning reforms and Warm Homes Bill
Take centre stage at UK Construction Week London.