You finished the work six weeks ago. The money is still not here.

You did $128,000 of work this month. Watch what happens to it on the way to your bank account.

The waterfall from claim to cash

Start with the work, valued on the schedule of values from Week 9 — $154,857 cumulative, because you claim against the SoV, not your cost. Add the materials on site, but only the ones with a vesting certificate, because Week 12 taught you what happens to the ones without. That is your gross valuation: $175,537.

Now the client's engineer starts subtracting. Retention, five percent, held back: minus $8,777. That gives the net value of everything to date. Then he subtracts everything he has already certified — $95,000 — because an interim valuation is cumulative. You value the whole job to date, every month, and the certificate is only the difference.

That cumulative habit is a quiet gift, by the way: if you got a number wrong last month, this month's full revaluation corrects it automatically. You are never locked into an old mistake.

The certificate comes out at $71,760. You did $128,000 of work and this piece of paper promises you seventy-two. The rest is retention, timing, and the work that is still being valued.

The clock the contract runs

Now the part that turns a certificate into a cash flow problem: the calendar.

You apply at month end. The engineer takes about a week to value it, cut it, and issue the certificate. Then, under FIDIC Clause 60 — the standard the whole industry is built on — the employer has twenty-eight days from the certificate to pay. Add it up and the money for work you finished lands roughly thirty-five days later. And the final certificate, at the end of the job, is slower still: eight weeks, not twenty-eight days.

Read that as what it is. Every single month, by contract, you do the work, you pay your gang and your suppliers, and then you wait a month or more for the client to pay you for it. You are lending him a month of working capital, continuously, for the entire job. It is not a delay anybody is being unfair about. It is written into the contract you signed.

The contract does protect you, in two ways worth knowing. If the employer misses the twenty-eight days, interest runs automatically — the money is your right, not his favour. And if he stays late, past a further grace period, you gain the right to suspend the works or terminate. The payment clock is one of the few places where a contractor has real teeth, and most never use them because they never read the clause.

The money the client keeps

Then there is retention, and it deserves its own look, because it is the most expensive five percent in construction.

Five percent comes off every certificate and goes into a pot the client holds. On this job that pot fills to $50,000. And it comes back in two halves. Half — $25,000 — is released when the building reaches practical completion. The other half sits in the client's account until the end of the defects liability period, which is typically twelve months after you have finished and left.

Look hard at that second $25,000. It is money you have earned, for work that is built and signed off, and you cannot touch it for a year. It is doing nothing for you and earning interest for him.

And you have seen that exact figure before. Fifty thousand dollars is the management reserve from Week 5 — the money that sat above your baseline, out of your reach. The wheel has turned all the way round: the reserve you couldn't touch on your own project is now the retention the client won't release on his. Everyone in the chain holds the next person's money, and it all comes out of the same working capital.

The gap you actually finance

Put the pieces together and you can size the hole from Week 16 exactly.

You spend roughly $69,000 a month. The payment lag of about thirty-five days means that at any moment there is around $80,404 of work you have done and paid for but not yet been paid for. On top of that sits the $50,000 of retention, locked away. Together, that is $130,404 of your own money tied up in someone else's process — working capital you must find, from the bank or your own reserves, before the project has done anything wrong at all.

That is the machinery under last week's $60,000 hole. The income curve arrives late because the certificate takes a week and the payment takes twenty-eight days. It arrives low because retention shaves five percent off the top. The cash flow is not an accident of the project — it is a direct, calculable consequence of the words in the contract, and once you can read the words you can forecast the cash to the day.

Practical insight

Open your contract to the payment clause — it will be there, however much nobody has looked at it — and find three numbers. How many days the client has to pay after certification. What percentage the retention is. And when each half of the retention is released.

Those three numbers set the shape of your entire income curve. If you are building a cash flow forecast without them, you are guessing, and you will guess optimistically, because everybody does.

Then find the total retention held against you today and check the date each slice is due back. Retention is quietly forgotten more often than any other money on a project — released late, or not chased at all, because the job is finished and everyone has moved on. That is your money. Somebody has to remember it is coming.

Key takeaways

✔ Getting paid has three stages: the valuation you claim, the certificate the engineer agrees, and the payment that arrives. All three differ.
✔ The certificate is a waterfall: work valued on the SoV, plus vested materials, minus retention, minus everything previously certified. $128,000 of work became a $71,760 certificate.
✔ Interim valuations are cumulative, so an error in one month self-corrects in the next.
✔ Under FIDIC Clause 60 the employer pays within 28 days of the certificate — about 35 days after you finished the work. The final certificate takes 8 weeks.
✔ Late payment carries interest from day 28; sustained non-payment gives you the right to suspend or terminate.
✔ Retention is 5%, returned in two halves: at practical completion, and a year later at the end of defects. That second half is earned money you cannot touch for a year.
✔ The $50,000 of retention is the same figure as Week 5's management reserve — now held over you.
✔ Payment lag ($80,404) plus locked retention ($50,000) is $130,404 of working capital you must fund — the machinery under Week 16's hole.

What is coming next

You now understand the gap and why it exists. Which raises a dangerous idea: if getting paid is this slow, and growth means doing more work before being paid for it, then growing faster makes the gap bigger.

A contractor winning more work, taking on bigger jobs, celebrated by everyone — and quietly running out of cash faster with every new contract. It is the most counterintuitive way to go bankrupt in business, and it kills profitable, growing companies more reliably than any recession.

Next week: overtrading — how success, all by itself, can sink a contractor.