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
C20 Society; Buildings at Risk List 2025
10 more buildings published with updates on the past decade of buildings featured.
Boiler Upgrade Scheme and certifications consultation
Summary of government consultation, closing 11 June 2025.
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
From project managers to rising stars, sustainability pioneers and more.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.