Step 1: Prepare - Make your invoices compliant

Prepare - Make your invoices compliant

Two key documents can transform your cashflow:

  • Quote
  • Invoice

Invoice (Payment Claim)

Under the Construction Contract Act your outstanding invoices can be re-issued as Payment Claims - which has the effect of making them 'supercharged invoices' - and it enables you to then use the payment regime under the Act.

Adjusting your invoice template to make it a Payment Claim and make it compliant with the Act is easy. Your Payment Claim must have all the information in the checklist below:

Payment Claim Checklist

  • Has the words THIS IS A PAYMENT CLAIM UNDER THE CONSTRUCTION CONTRACTS ACT 2002 on the invoice. Either at the top or the bottom of the invoice is usually best.
  • States a due date for payment. This must be a calendar date i.e. DUE DATE FOR PAYMENT: 27 September 2019. (Having "payable within 7 days' will not be sufficient).
  • States the job location i.e PROJECT REF: 2 PALFREY ROAD, FENDALTON
  • States the approximate period during which the work was carried out i.e. PERIOD FROM: 1 August 2019 PERIOD TO: 30 August 2019.
  • If it's a charge up job then you need to list the hours worked, refer to the applicable charge rates and list the materials and prices for those.
  • If there are variations then indicate how those were calculated i.e. labour rates, hours worked, materials and margin, or refer to any agreement on the price for that variation
  • You must attach the Form 1 Information Sheet to all of your invoices.

All unpaid debts can be reissued as Payment Claims. All new invoices can, and should, be sent as Payment Claims.

Sample Payment Claim

What if your client has a dispute?

The Act requires a specific process to be followed by a client if they wish to dispute some or all of a Payment Claim. They cannot hold back all payment because of one small issue. They must issue what's called a Payment Schedule in writing if they have a dispute - and they must issue it within a defined period of time.

If they do not issue the written Payment Schedule, then you can collect payment in full. This is because the Act has a 'pay now, argue later' regime.

The normal time limit for replying with a Payment Schedule is 20 working days (or 5 working days if you use the Terms and Conditions example below on your quotes).

If a Payment Schedule is issued by your client in time, they can only hold back payment for the part of the Payment Claim they are disputing. The rest of the payment claim must be paid.

If in doubt - re-issue your unpaid invoice as a Payment Claim.

Quote Terms and Conditions

Your quote is a contractual document. If it has terms and conditions that focus on you getting paid, then those terms will form part of your contract.

A contract can be written, verbal or partly written and partly verbal. In the absence of a formal written contract then often your quote is the only written existence of the contract.

We have provided an example Terms and Conditions for you to use on your quote. These are the basic terms needed to help you get paid. Sure you can have many more terms but likely those will be 'nice to haves' rather than being purely focused on getting paid.

Actions you can take right now:
  • Update your invoice template to be a Payment Claim, see example Payment Claim
  • Once you have updated your Payment Claims email us a copy for a free review, just to ensure you're meeting all the requirements. Email us at
  • Re-send your new Payment Claim to clients for any unpaid debts (email is best as it shows a date sent)
  • Update your Quote Terms and Conditions using the example provided
  • If you have now a valid, expired Payment Claim (i.e. not paid within the required time frame) find out more about STEP 2 and how we use a Letter of Demand these to get almost all remaining debts paid.
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