Cash-flow is a well rehearsed issue within the construction industry and is a common reason for contractors and other members of the supply chain becoming insolvent. This can cause significant issues for a project in terms of both time and money.
Some construction companies are turning to "dynamic discounting" to help support suppliers with getting paid early if they reduce their bills. The technology broadly works by analysing the available cash-flow position of the company and then calculating the discount rate that suppliers can offer to access this money, in exchange for earlier payment of invoices.
The introduction of innovative and flexible payment options such as this can only be a good thing to help alleviate some of the cash-flow pressures that are faced by supply chains.
Tarmac is the latest large construction company to offer to pay suppliers early if they shave money off their bills