Are you finding that your payment reminders are being met with excuses? It’s a common scenario many business owners are experiencing.

Here at the SBDC, we often hear from small business owners, particularly subcontractors in the construction industry, who say they are struggling to be paid on time. But when the only ‘evidence’ of a contract is nothing more than a handshake, a few text messages or a phone call it can be very hard to prove that you’re actually owed money.

To avoid payment disputes, there are simple steps you can take to put systems and processes in place to help you get paid the right amount, on time.

Get your order in writing

  • Make sure you agree on the price and don’t start work until you receive written acceptance of your quotation or negotiated price.
  • Make sure both you and your client fully understand the scope of works, what you are doing and – just as importantly – what you are not doing.
  • If you are given a purchase order with terms and conditions or a subcontract agreement, read it carefully. If you don’t understand, seek advice, or contact our free advisory service to discuss
  • It’s also a good idea to keep evidence of any work completed (or still yet to be done). Before and after photos (or video) are a simple option, just make sure you save them in a way that allows for easy retrieval when required.

Managing expectations

  • Make sure you receive copies of any related plans and specifications. If there are discrepancies in the documentation, notify the head contractor as soon as possible.
  • Carry out your work according to the plans, specifications and industry standards. If you don’t, you may make it easier for the head contractor to deny payment until your work meets expectations.
  • By starting the work, you’re essentially accepting the condition of the work area. Be sure to check it’s in a suitable condition.

Systems and processes

  • Avoid verbal agreements, handshake contracts and text confirmation. These are all high risk options as you can’t prove what was discussed or agreed to. Record details and costs of any variations in writing and consider whether they impact the agreed timeline. If they do, notify the head contractor immediately.
  • In addition, do not proceed with a variation unless it is agreed in writing.
  • Find out what sort of project management system the head contractor uses (if any), and whether you’re required to use this system too, this could be helpful, particularly with communications.
  • Follow the terms of the contract and bear in mind when retentions are due and how you’ll claim for them. A simple calendar entry is a good idea.


Are your progress claims simple or complex? If they are complex, consider a better software management system. There are many options, with BQE Core, Zero and Databuild being amongst the most popular.

Make sure you submit your invoices or progress claim on time and in line with the contract terms.

In addition to having the date and job address stated on your invoice, make sure you also include:

  • purchase order number
  • your business name and ABN
  • the recipient’s full name as listed on the contract
  • the deduction of the retention, if applicable
  • the total invoice amount (including and excluding GST)

Read our article on how to prepare an invoice for more useful tips on what you’re invoice needs to include.

Tip: track your payments and receipts, and if an invoice has not been paid, follow up quickly.

Tracking your work

  • Have a system of documenting your work, in hard or soft copy, and use it routinely to include your site diary notes, and any variations or extensions of time.
  • Job folders can help you save and then easily retrieve any documentation, like emails and photos, these are a great way to prove work progress.
  • Keep records, the more records the better.

Text messages are a no-go

Bear in mind that text messages may not be considered an official source of communication. Write down and document everything, from plans and variations, to retentions and any contract agreement terms and confirm by email.

More information

If you’ve done all this and are still getting excuses instead of payments:

Dispute resolution
25 September 2019