Payment period
Contents |
[edit] Introduction
The payment period is the period of time from the point a debt is incurred to the due date of the repayment. The average payment period is the average time a company takes to make payments to its creditors.
With credit card payments, the payment period is usually around a month from when the item was purchased. If payment is not received by the due date, interest charges will apply. With mortgage payments, the payment period is also usually a month, although with some it can be biweekly.
Typically, in business, when invoices for work undertaken are submitted to the buyer of goods or services, the payment period is 30 days, however it is not uncommon for companies to have an unstated policy of flouting the payment period by as much as two to three months. This is usually for no other reason than it is the culture of the company to behave in that way, but can also be a sign of cash-flow problems.
[edit] Construction industry
In the construction industry, payment can be the source of a great deal of acrimony. Not only are the sums involved very large, and the duration of projects very long, but the total amount payable tends to change over time. In addition, contractors, subcontractors and suppliers face considerable risk when pricing construction projects, and optimistic pricing or late payments (ie the payment due does not arrive within the payment period) can quickly cause cash-flow problems.
As a result, payments are often the source of disputes which can ultimately lead to a breakdown in relationships and even project or business failure.
This is exacerbated by the very long supply chains that can exist on construction problems, with payments taking considerable time to filter from the top to the bottom.
The construction industry has introduced a wide range of initiatives in an attempt to eradicate late payment. For more information see: Remedies for late payment.
[edit] Pay period
Payment period should not be confused with 'pay period' which is the length of time – usually recurring – over which employees are paid. Pay periods depend on the employer and the nature of the work but can be weekly, bi-weekly, semi-monthly, monthly etc. Professional salaried employees are typically paid per calendar month, while manual workers may be paid weekly or even by the day.
[edit] Related articles on Designing Buildings Wiki
- Causes of construction disputes.
- Construction invoice fraud.
- Construction supply chain payment charter.
- Fair payment practices.
- Housing Grants, Construction and Regeneration Act.
- The Late Payment of Commercial Debts Regulations 2013.
- Payment notice.
- Payments to nominated sub-contractors.
- Pay less notice.
- Payment schedule.
- Project bank accounts.
- Prompt payment code.
- Scheme for construction contracts.
- The causes of late payment in construction.
Featured articles and news
Regulator of Social Housing publishes latest fire safety report
Covering remediation of 11 metre plus social housing sector buildings.
Apartment and Duplex Defects Remediation Bill 2024
Approved for priority drafting by Government of Ireland.
The long list with in the frame of key historical events.
Competence frameworks for sustainability in the built environment
Code of practice, core criteria consultation draft for comment.
UK Net Zero Carbon Buildings Standard Sept update
Pilot version for testing and feedback on its adoption due.
New Floods Resilience Taskforce
With a wet met office autumn prediction.
National Retrofit Hub takeover of Net Zero stage
At Birmingham UK Construction Week in October.
AT Awards 2024 finalists announced
With more to come, prior to the Awards ceremony in October.
London construction cools as hotspots appear nationally
Increases in the East of England, Yorkshire and Scotland.
ARB proposals for a new Architects Code
Announced in the shadow of the final Grenfell Inquiry report.
Combining human creativity and tech innovation now and in the future
Building automation and control systems market study
BSRIA 2024 North America BACS software & services.
Impact of digital technology on productivity in construction
New CIOB academy guidance for companies of all sizes.
Demolition and retrofit approaches in Planning Policy
MHCLG demolition and retrofit survey to inform future updates to national planning policy.
Expert taskforce to spearhead new, new town generation
Sir Michael Lyons given 12 months for recommendations.
Government policy statement on new towns
A coded vision for a new generation of new towns.