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Construction

Every construction business is different, however there are particular issues that construction businesses face, which are unique to the sector. The form of contract being principal among the problems faced. Whether you are using JCT contracts, NEC contracts, Cost Plus contracts or Lump Sum contracts, many firms have problems with contracts and their customers! These can lead to cashflow and solvency problems for your company, partnership or LLP.

That’s where we come in. Often with low margins and tough trading conditions, cash flow can be a problem. Below are some of the common problems we’ve seen happen in the industry:

  • Contract arguments and QS problems.
  • Bad debts.
  • Delays in repayments from HMRC, regarding CIS deductions (which are connected to PAYE scheme). HMRC can be slow in making CIS refunds, leading to issues with cash flow.
  • Time to pay deals with HMRC for PAYE and VAT (where applicable) being too expensive for your cashflow.
  • Losses made on large contracts, where large clients or main contractors slow down payments and sometimes go into administration. Hitting YOUR cashflow.
  • So called “subby bashing”.
    Issues with sub-contractor non performance or slow completions.
  • Difficult customers, be they private individuals, clients or contractors – who add extra work on and won’t pay extra!
  • Lengthy contracts with material prices agreed at beginning. I.e. quotes do not keep up with rising costs. Especially tough after huge price rises in 22-23.
  • Less focus on financial accounts, financial management due to directors and management being onsite.
  • Hard to win new contracts if cash flow is tight, perhaps due to low credit rating.
  • Retention sums not released at agreed times.
    Suppliers taking legal actions such as County Court Judgments, or even issuing winding up petitions.

 

As turnaround practitioners with expertise in the construction sector going back to 1996 when we did our first rescue of a north east construction firm, KSA’s construction specialists can help tackle these issues with you to get your construction or building business back on track. We can go through all the available options, like expert assessment of the issues your company faces, showing you how to improve financial reporting, securing long term Time to Pay deals with HMRC and suppliers, writing powerful CVA deals and getting your costs down (cash free) and pre-pack administrations. Obviously many construction companies are no longer viable and creditors voluntary liquidation may be necessary. See our rescue stories below where we have helped construction companies!

If you are looking for extra funding, or even just a change in finance provider, then please consider our financing services that we offer on our sister site www.companyfundingoptions.co.uk. We have lots of experience in funding construction companies!

We also have industry specific turnaround experts who can act as non-executive directors, chairman or turnaround managers. We have turned around construction companies from £500k to £65m sales.

Call us on 0800 9700539 for free expert advice and a talk through your options. We can visit you onsite to discuss your specific situation after we have run our “anti money laundering” and “know your client checks” that all professional and regulated businesses must do before engaging with prospective clients.

 

Construction Trade Magazine points out that the construction industry has the highest insolvency rate.

Construction Digger

Specific Guides For Construction Sector

Rescue Stories


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