No matter which type of contract your organisation is working under, Applications for Payment (AfP) are an essential part of the construction process. They ensure that contractors and subcontractors at every level of the supply chain are paid fairly and on time for the work they deliver.
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The Legal Framework
In the UK, it is a legal requirement that interim payments are made on construction contracts lasting more than 45 days. Because of this, most payment schedules run on a monthly cycle.
This cycle involves three main steps:
- Submission – Contractors or subcontractors submit their application for payment by the agreed date each month, along with the necessary supporting evidence.
- Assessment – The client has a set period (typically 2–3 weeks) to review and assess the application.
- Payment – Once agreed, an invoice is raised for the certified amount, and payment is made on the date specified in the contract.
The Role of Withholding Notices
During assessment, the client may issue a withholding notice if part of the application is disputed. This document explains why a reduction has been made and could include reasons such as:
- Lack of, or insufficient, back-up to substantiate the application value.
- Loss or expense suffered by the payer due to the payee’s actions.
- Damage to materials.
- Failure to complete agreed works on site.
While withholding can be frustrating, the client should provide robust explanations for any deductions. In many cases, the supply chain member can re-apply for the withheld costs in the following month if further evidence can be provided.
Managing the Process Effectively
Here at Metroun, we’ve developed an Application Workbook Template, available as a free download in our templates section.
The workbook is designed to support both clients and contractors by:
- Logging every application so nothing slips through the cracks.
- Providing clear columns for key details such as values, dates, and project information.
- Allowing clients to record comments, withholding amounts, or requests for further back-up.
- Creating a transparent record that can be shared across the supply chain.
By standardising the process, the workbook ensures consistency, reduces the chance of disputes, and helps streamline the monthly payment cycle.
Final Thoughts
Applications for Payment are the backbone of fair cashflow in construction. By submitting timely, well-supported applications, and by using tools such as the Metroun Application Workbook, contractors and subcontractors can protect their businesses while clients maintain control and transparency.
A simple but structured approach is often the most effective way to keep projects moving, payments flowing, and disputes at bay.
