We are now truly blessed in this country, by widely (or is that wildly?) different ‘Security of Payment’ Acts in each State and Territory. We now have eight Acts in all.
I know of several large contractors operating on the East coast (QLD, NSW, ACT, VIC) and some also operating in SA. So these contractors have to contend with up to five different Acts during their daily operations. Ok, they will have different teams in different places, so each team only has to deal with one set of rules, but the central management and financial system has to have the power and functionality to manage the different rules in different places.
Fortunately, Cheops is up to the task!
In this post, I examine the different Acts in terms of subcontract payments due dates, and how Cheops manages each one.
In QLD
Building Industry Fairness (Security of Payment) Act 2017
A progress payment becomes due and payable:
(a) If the contract provides – on the day determined by the contract (but no more than 25 business days); or,
(b) If the contract does not provide – 10 business days, after the day a payment claim is made. In QLD, we have payments due 10 to 25 business days after the claim.
In NSW
Building and Construction Industry Security of Payment Act 1999
A progress payment becomes due and payable on:
(a) the date occurring 20 business days after a payment claim is made; or
(b) an earlier date as provided in accordance with the terms of the contract.
In NSW, we have payments due up to 20 business days after the claim.
In ACT
Building and Construction Industry (Security of Payment) Act 2009
A progress payment under a construction contract is payable:
(a) on the day when the payment becomes payable under the contract; or
(b) if the contract does not set a day – 10 business days after a payment claim is made.
In the ACT, we have payments due whenever the contract dictates.
In VIC
Building and Construction Industry Security of Payment Act 2002
A progress payment becomes due and payable:
(a) on the date on which the payment becomes due and payable in accordance with the terms of the contract; or
(b) if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.
In Vic, we have payments due whenever the contract dictates (same as the ACT).
In SA
Building and Construction Industry Security of Payment Act 2009
A progress payment under a construction contract becomes due and payable:
(a) on the date on which the payment becomes due and payable in accordance with the contract; or
(b) if the contract makes no express provision with respect to the matter – on the date occurring 15 business days after a payment claim is made under Part 3 in relation to the payment.
In SA, we have payments due whenever the contract dictates.
In WA, NT and TAS
And then there are Acts in WA, NT and TAS – eight in all. Some States and Territories allow the contract to control the payments, and others mandate a maximum period – some in business days and some calendar days. It is a great shame that our State leaders cannot get together and agree, but that is politics!
How Cheops can help
So now to return to Cheops. The system can handle your needs whatever they are and wherever you are! Some jobs are 10 business days, some jobs are 20 business days, and some jobs 30 days, (calendar days or end of month). Jobs can even be in the same company if that is how your business operates.
You may set the payments terms at the subcontract, the project, the company, or the overall system level. Flexibility is the key and Cheops has you covered.
Find out more about Cheops Solutions here or book a demo today.
Author: Graeme Bottrill – CSSP Cheops Consultant, NSW