Payment claims and payment schedules: what actually has to be right

Most people in construction think of a payment claim as an invoice. It is not. On a New Zealand construction contract it is a formal document with a job to do, and the response to it matters just as much. Get either one wrong and the consequences land on your cash flow, not on a filing cabinet somewhere.

What a payment claim has to do

A payment claim sets out what you say you are owed for a defined period, and why. That means the claimed amount, the work it relates to, and enough detail that the other side can actually assess it rather than guess. A claim that says “stage 3, $84,000” invites an argument. A claim that breaks the figure down against the contract sum, shows measured progress, and lists variations separately does not.

The payments regime in the Construction Contracts Act 2002 sits behind all of this. Your contract will set out the timing and the format, and the Act underpins what happens when the process is not followed.

The payment schedule is the part people miss

When a payment claim arrives, the payer responds with a payment schedule. That schedule has to say what they propose to pay, and where that differs from the claim, it has to say why. Not “under review”. Not silence. The reasons need to be specific enough that the claimant can see exactly which items are disputed and on what basis.

This is where projects come unstuck. A payer who lets the response window pass, or who sends back a figure with no reasoning attached, can find themselves in a much weaker position than the merits of their argument deserve. The paperwork failure becomes the problem, separate from whether the work was worth the money.

Where a quantity surveyor fits

On the claiming side, we prepare claims that are measured against the contract rather than estimated from memory, with variations priced and evidenced as they arise instead of swept into a final reckoning nobody can unpick later.

On the paying side, we assess claims independently. That means checking measured quantities against what has actually been built, testing variation pricing against the contract rates, and drafting the reasons that go into the payment schedule so they hold up if the matter goes further.

Either way the aim is the same. Both parties should be arguing about the substance of the work, not about whether a document was served correctly.

Three things worth checking on your current job

Read your contract for the payment timetable and diarise it. The dates are contractual, not conventional, and they vary between forms.

Keep variations current. A variation priced and agreed in the month it happens costs a fraction of the time and goodwill that the same variation costs eighteen months later at final account.

Never let a payment claim go unanswered because the numbers look wrong. Respond with a schedule that says so and explains why. Disagreeing properly is far cheaper than not responding at all.

If a claim has landed on your desk and you are not confident about the response, or you are preparing one and want it checked before it goes out, call Adam on 021 701 664.