Subcontract packages and payments

Set the package up separately

1. Open the Subcontractors tab and enter the package name, the subcontract sum and the retention rate.
2. Set the payment cycle. It is not the same as the main contract cycle and should not be.
3. Enter the subcontractor bill if you are valuing line by line, or value against the package total.

You are the payer here

Under the Construction Act, the payment notice comes from the payer. Upstream you apply; downstream you notify. Getting that the wrong way round is the commonest confusion in the whole payment regime.

1. Value the package and issue the payment notice to the subcontractor.
2. If you intend to pay less than the notified sum, issue a pay less notice before the deadline.
3. Both dates run on the subcontract timetable, not the main contract one.

Aligning the cycles

Aligning the subcontract due dates so they fall after the main contract dates is legitimate and sensible: it gives you time to be paid before you must pay.

Making payment conditional on being paid is not. Pay-when-paid clauses are prohibited except where the third party is insolvent, and calling the arrangement back-to-back does not change that.

What the cash position shows

With packages set up, the dashboard shows client receipts against subcontractor payments in one place. That difference, month by month, is the working capital the job actually needs.