In most industries you raise an invoice and expect to be paid. In construction it is rarely that simple. Payment usually runs on applications for payment under the contract, and the date you get paid is set by the contract, not by your invoice. Understanding the difference protects your cashflow and your legal rights.
What is an application for payment?
An application for payment (often called an AFP, a payment application or a valuation) is your claim, at a point in the contract's payment cycle, for the value of work done to date. On most projects you apply at regular intervals against a payment schedule, the work is valued, and a sum is certified for payment.
The payment cycle
A typical interim payment runs like this:
- Application: you submit your valuation by the date in the contract.
- Due date: set by the contract, this starts the clock.
- Payment notice: the payer states the sum they consider due, within five days of the due date.
- Pay-less notice: if the payer intends to pay less than notified, they must say so before the final date for payment.
- Final date for payment: when the money must actually reach you.
Why the invoice is not the trigger
Your VAT invoice is usually raised after the sum is certified, to match what will be paid. The payment obligation comes from the application and the contract's notice mechanism, not from the invoice itself. This is why "I have sent my invoice" does not, on its own, fix when you must be paid.
Get the application right
A late or incorrectly served application can lose you a whole payment cycle. Submit on time, in the form the contract requires, and keep proof. If a payer fails to serve a valid payment or pay-less notice, the sum you applied for can become the notified sum they are obliged to pay. For how those notices work, see the Construction Act explained.