Late Payment in Public Contracts: What Suppliers Should Check and Record

# Late payment in public contracts: what suppliers should check and record

When a public-sector invoice is overdue, the fastest useful first step is to reconstruct the payment timeline. Keep the invoice, evidence of when it was received, any request to correct it and the contractual due date together. A clear record helps the buyer resolve an administrative issue and gives the supplier a sound basis for escalation if payment remains outstanding.

The precise legal position depends on the procurement regime, the contract and any applicable exceptions. For many public contracts under the Procurement Act 2023, the Act implies a 30-day payment term into the public contract and relevant subcontracts. The Cabinet Office guidance explains how receipt, valid and undisputed invoices, and notification of disputes affect that duty. Do not assume that every older contract operates under the Act's provisions; check the regime and terms first.

Build a payment record before chasing

For each unpaid invoice, keep:

- the contract or purchase order reference and the legal entity being billed; - the invoice number, amount, tax treatment and service or milestone description; - the date the invoice was sent, the method used and evidence that the customer received it; - the buyer's invoicing instructions and evidence that the invoice met them; - any acknowledgement, rejection, dispute or request for correction, with dates and reasons; - the contractual payment period, calculated due date and the date any payment was received.

If the buyer requires an electronic invoice, check the agreed address, portal or format. A sent email is not always proof of receipt by the right team. If an invoice is rejected as invalid, ask what specifically needs correcting and preserve both versions and the response trail.

Identify the issue behind the delay

Separate three common causes. **Processing delay:** the invoice is valid and undisputed but has stalled in an approval or supplier setup queue. **Genuine dispute:** the buyer identifies a specific problem with the goods, services, amount or evidence. **Contract mismatch:** the purchase order, milestone or invoicing trigger is unclear or has not been met. Each calls for a different response.

Ask the buyer to identify any dispute or invalidity promptly and in writing. A generic “on hold” status gives neither side enough to resolve the point. If only part of the invoice is disputed, ask how the undisputed amount will be handled under the contract and applicable law. Keep operational colleagues involved so that a delivery issue is addressed alongside the accounts process.

Check the applicable payment rule

For contracts governed by the Procurement Act 2023, read the contract alongside the Cabinet Office guidance on electronic invoicing and payment. The Act's implied payment term generally requires payment within 30 days of receipt of a valid and undisputed invoice, subject to the legislation's scope and exceptions. The term cannot simply be overridden by longer wording in a covered contract. The guidance also explains prompt notification when an invoice is considered invalid or disputed.

For a contract awarded under earlier procurement regulations, check its own terms and the rules saved for that contract. Do not treat the publication date of a new notice or the date of an invoice as proof that the Act governs the underlying contract.

Suppliers working as subcontractors should also check which payment term flows down, who must receive the invoice and how disputes are communicated. Document the chain between the prime contractor and the public buyer where relevant, while addressing the party that actually owes the payment under the subcontract.

Escalate with a concise evidence pack

Start with the named contract manager and accounts payable contact. State the invoice number, amount, receipt date, calculated due date and current status; attach the invoice and supporting evidence. Ask for either a payment date or a specific written explanation of what prevents payment. If the first response does not resolve it, follow the contract's escalation route and involve the commercial lead. Keep the tone factual and record each commitment and follow-up date.

Recurring delays deserve a wider discussion. Compare the cases for common causes such as purchase order setup, acceptance sign-off or portal data. This can improve future payment performance without turning every invoice into a formal dispute. If a material sum remains unresolved, seek advice on the contractual remedies and facts before taking a legal step.

A disciplined record protects cash flow and makes the conversation precise: what was owed, when a valid invoice was received, what was disputed, and what happened next.

### Primary sources

- Cabinet Office guidance: electronic invoicing and payment under the Procurement Act 2023 - Cabinet Office guidance: transitional and saving arrangements

*This is a practical overview, not legal advice. Check the contract, legislation and current guidance for the specific payment.*