Revealed: Tradespeople losing more than £1,000 per year from withheld paymentsNews
Posted by: electime 6th April 2021
• Plumbers face more delayed payments than any other trade
• Experts share advice for securing late payments
UK tradespeople are seeing over £1,000 of payments per year withheld by customers following a completed job.
The research, conducted by IronmongeryDirect, found that an average £1,062 is owed to tradies across the UK. A third (33 per cent) said they were waiting for over £1,000 from customers for completed jobs, whilst nearly one in ten (7 per cent) are owed over £3,000.
Nearly two thirds (61 per cent) of tradespeople have had payments withheld by customers, which occurs twice per year on average. More than one in ten (12 per cent) however, experience withheld payments more than five times a year. Only 6 per cent of tradespeople say that the payment issues are resolved within a week, whilst more than one in five (22 per cent) have had to wait more than a month to be paid for a job.
Plumbers were found to be the most likely to have to deal with payment problems, experiencing withheld cash 2.6 times per year on average. Landscapers, meanwhile, experienced the fewest issues, with an annual average of only 1.2 times.
Trades most likely to have payments withheld (times per year)
1. Plumber: 2.6
2. Electrician: 2.4
3. Builder: 2.3
4. Bricklayer: 2.2
5. Carpenter: 1.9
6. Surveyor: 1.8
7. Joiner: 1.7
8. Painter & decorator: 1.6
9. Plasterer: 1.3
10. Landscaper: 1.2
Builders are owed the most, with an average of £1,375 withheld by customers, with nearly half (45 per cent) saying they had over £1,000 of outstanding payments. Bricklayers (44 per cent) and carpenters (40 per cent) are experiencing similar rates of withheld cash.
Plasterers were found to be owed the least, with an average of £535 outstanding, followed by landscapers (£615).
Female tradies were found to receive payment quicker than their male counterparts, experiencing higher rates of payment within a week (8 per cent vs 4 per cent) and within a fortnight (34 per cent vs 20 per cent).
However, women were also found to be owed higher sums of money, with an average of £1,168 outstanding, compared to £972 for men.
When it comes to age, millennials (25-34 year olds) are more likely to experience withheld payments than older tradespeople, with an average of 2.5 payment issues per year, compared to 1.6 for 55–64 year olds and 1.7 for over 65s. People in this age group were also more likely to be owed larger sums of money, with millennials owed the most at £1,258 compared to other generations.
Despite this, invoice problems were solved quicker for younger generations, with 14 per cent of millennials waiting more than a month for payment, compared to half (50 per cent) of 55–64 year olds.
Alison Werner from the UK’s leading business coach for trades and construction industry, The Trades Coach, said: “Be sure to display your full terms and conditions in the original quote, as well as your website. This should include a full breakdown of costs and a clause for late payments. Regular communication will also help address any misunderstandings as they arise and will also be looked upon favourably in the rare event of legal proceedings.
“There might be a reasonable reason why a customer is late paying, so it’s important not to assume the worst and firstly find out what the issue is. Having a telephone conversation is the best place to start and then follow this up with an email and regular email reminders. If payment is still not received after several months, you should consider hiring a debt recovery company who will take a small commission to recover payment on your behalf.”
Dominick Sandford, Director and Head of Merchandising & Marketing at IronmongeryDirect, said: “Withheld payments are an annoyance that every tradesperson has to deal with at some point or another, but when significant amounts are owed by customers it can become a serious threat to your financial security.
“It’s shocking to see how much tradespeople are waiting on and how long they’re having to wait for their payment following a job. We hope our useful tips help tradies get paid quicker and without any hiccups along the way.”
For more tips on dealing with outstanding payments and your legal rights, visit: https://www.ironmongerydirect.co.uk/blog/expert-tips-for-handling-unpaid-invoices