Risk in construction

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Risk in construction

A few months ago, Grant Tod www.bstructured.co.uk  produced a document entitled Contract Check List; he was kind enough to ask for the input of Jim Sleith www.jmscredit.co.uk in respect of credit risk and payments; I was delighted to give my input but, it set me wondering, why do construction companies consider the following risk categories and ignore credit risk and risk of late or non-payment?

A few items which I would expect to be Considered: –

  1. Is the bid too high or too low?
  2. Is there enough wriggle room for a decent profit?
  3. Timescales of starting work and completion
  4. Costs of materials
  5. Health and Safety

Now what I believe is not considered :-

  1. Credit Risk
  2. Payment terms
  3. Costs of getting paid
  4. The Terms & Conditions you are signing up to
  5. Health and Safety

Hold on I hear you cry!  how can you say we have not considered health and safety when you clearly stated that you expect it to be considered? Well, consider point 1-4 of what I believe is not considered; go on, have a think about it!

Still not got it?  Here’s a clue


Yes stress; you see, no matter how much you have planned, no matter how well the job goes and all the boxes you have ticked, RSIK OF NON-PAYMENT OR LATE PAYMENT can, will and do impact on your health.

All of a sudden that job you put so much planning in to, so much effort it to, used to much cash to keep the project on track etc. is turning in to a nightmare and not because you provided a poor service but, because it now looks like you won’t be paid.

So, go back and ensure that credit risk is a priority in your risk assessment, it may well save you a lot of stress in the future.

Contact Jim Sleith for more information on credit risk and review of terms and conditions as whilst no one can guarantee you will be paid, we can at least asses the risk.

If you would like a copy of Contract Check List document, please contact Grant Tod  07738 463969 – Grant@qsadvisor.com

Written by

Jim Sleith

JMS Credit Consultancy ®

 © Jim Sleith – JMS Credit Consultancy

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