Frequently Asked Questions

As a construction project Developer/Financier, it’s important to know that your investment is being handled responsibly & funds are being used for their intended purpose, payment of Suppliers & Subcontractors. It’s standard practice for Builders to manage multiple projects from a single account, which means your progress payments are being thrown into the pot & are almost certainly being used to pay bills linked to other projects. When a Builder becomes insolvent, it can be extremely difficult to track down where this money has gone & even harder to get it back. The resultant delays can also significantly increase holding costs to the Developer.

IPEX helps to minimise risk by providing Developers with complete visibility of their project’s finances in real-time, delivering the insights they need to make informed decisions quickly. Additionally, IPEX ensures that the project funds can only be distributed to verified subcontractors and suppliers on your project, ring-fencing your project and protecting it from misuse of funds. With IPEX backing your build, you get the peace of mind of knowing that your approved Builder is adhering to responsible project fund distribution, safe in the knowledge that your Builder cannot use your project funds to pay bills for any other projects or, for their own operational expenses.

Developers pay a fee based on total construction value to protect each project. Costs are extremely low considering the level of payment protection that IPEX provides.

IPEX primary purpose is simple; to ensure ALL project funds reach ALL intended recipients – the consultants, subcontractors, suppliers & builders that have performed work on and/or provided materials for the project. From a builders’ perspective, the additional level of certainty that IPEX provides to developers & lenders is already leading to positive changes to builder payment practices. Overall, IPEX aims to create a better, more sustainable construction payment model; one in which EVERY STAKEHOLDER is paid what they are due, every time & no individual party is required to carry disproportionate financial burden.

Proactive builders are already using IPEX as a tool to differentiate their bid & provide a competitive advantage in a tender. Offering to work under IPEX solves a significant issue for developers & lenders around insolvency risk, so any builder willing to work under this framework is viewed extremely favourably. Builders may also leverage the IPEX security & transparency to negotiate improved commercial terms, from modified security requirements to cash in advance for site establishment & certain supplier deposits.

There is no cost to Builders for using the IPEX platform.

Developers pay a fee based on total construction value to protect each project. Costs are extremely low considering the level of payment protection that IPEX provides.

Gain a Competitive Advantage in any tender & deter Builders with cash flow issues from tendering Backing your builds with IPEX can give you a competitive edge and help you win more contracts. Being willing to operate within the IPEX framework confirms to Developers & Lenders that you have no intention or need to divert funds to other projects – you can & will manage their investment responsibly, elevating your bid above non-IPEX capable Builders. IPEX also encourages contracts being awarded to legitimately priced bids with responsible margins built in. As IPEX prevents funds from being diverted to other projects, Builders who need to ‘buy’ a project simply will not bid. Meet Compliance Requirements & Reduce Administration For head contractors, managing multiple construction projects generates a huge administration overhead. From managing cash flow and juggling several budgets in a single account to distributing payments to a host of different stakeholders – recordkeeping and account management, can quickly become a full-time job. With IPEX, each project can be managed simply and separately through our intuitive payment interface, helping you manage project funds and pay stakeholders in seconds. With IPEX, you have all the tools you need to streamline project payments, avoid disputes, and record and monitor all transactions for your build. Promotion of ‘IPEX Ready’ Builders to our network of Developers Given all the talk in the media re: insolvency, there is significant interest from Developers in their running future projects through the IPEX platform. We are proactively looking for Builders who are willing & able to operate within the IPEX Framework so we can present alternate options to the Developer/Lender. These Builders will be added to our ‘IPEX Ready’ Builder List which will be widely distributed to our Developer network. Developers & Lenders will be able to search to see whether their preferred Builder is ‘IPEX Ready’ or, source new Builders that are willing & able to operate within the IPEX framework & invite them to bid. Build trust with Subcontractors & Suppliers IPEX also significantly lowers risk of non-payment for Subcontractors & Suppliers, helping to instil trust & potentially reducing their need for trade creditors insurance, encouraging more favourable pricing/terms for Builders.

In a market where projects are routinely costing more to build than the fixed price agreed, many builders are under increased financial stress. Whether intentional or not, some (not all) builders have been diverting subcontractor & supplier entitlements to cover cash shortfalls on other loss-making projects. This behaviour puts the ‘donor’ developers’ project at significant risk (even if this project is responsibly priced & completely viable); this risk is becoming increasingly unacceptable to not only the developer, but also financiers & investors. What’s worse (for developers, lenders & ‘good’ builders) is that it’s often very difficult to know which builders are doing this through standard due diligence alone. For this reason, more and more builders are being asked to work under the IPEX framework; in reality, IPEX is simply an extension of standard risk mitigating checks i.e. due diligence/stat decs; any builder prepared to work under IPEX is essentially ‘proving’ that they have no intention of using project funds to pay bills linked to other projects. There really should be minimal impact to the day-to-day operations of any builder who already passes on funds as intended however, there is far greater security & transparency of funds to those that finance these projects.

Proactive builders are already using IPEX as a tool to differentiate their bid & provide a competitive advantage in a tender. Offering to work under IPEX solves a significant issue for developers & lenders around insolvency risk, so any builder willing to work under this framework is viewed extremely favourably. Builders may also leverage the IPEX security & transparency to negotiate improved commercial terms, from modified security requirements to cash in advance for site establishment & certain supplier deposits.

IPEX primary purpose is simple; to ensure ALL project funds reach ALL intended recipients – the consultants, subcontractors, suppliers & builders that have performed work on and/or provided materials for the project. From a builders’ perspective, the additional level of certainty that IPEX provides to developers & lenders is already leading to positive changes to builder payment practices. Overall, IPEX aims to create a better, more sustainable construction payment model; one in which EVERY STAKEHOLDER is paid what they are due, every time & no individual party is required to carry disproportionate financial burden.

Standard operation of the IPEX platform allows developers to see which subcontractors & suppliers have been paid & when, but not how much. Of course, developers & builders may agree to open book terms which would allow full transparency – this is common in cost plus contracts or agreements that include advance payment for site establishment/material deposits. In specific scenarios i.e. cost plus projects, a developer making supplier deposits and/or additional contributions outside of the contract or if otherwise agreed between developer & builder, IPEX can be set up to reveal full account details to the developer/lender.

Standard operation of the IPEX platform does not allow the developer to see any contract values listed against subcontractors or suppliers – it simply takes the contract value you enter as 100% & shows the developer percentage paid against that value. This gives developers/lenders comfort in knowing funds are being passed on as expected but allows builders to conceal commercially sensitive information. Additional margin can be claimed via the IPEX ‘withdraw’ function; whether or not a line-item breakdown is required for approval will be determined by the agreement between developer & builder although typically, provided that the amount claimed is in line with agreed QS assessment, these funds are simply released to your operating account. This means additional trade letting wins are able to be concealed by the builder by being withdrawn in conjunction with prelims & other costs.

Each project (and IPEX implementation) is different; decisions around which subcontractors & suppliers that are to be paid through IPEX are determined by the agreement between developer & builder.

Some developers will mandate that all trades be paid through IPEX, others want only the top 10-15 by contract value. Typically, most agreements will require all trades outside of ‘prelim’ trades be paid through IPEX. Of course, best practice is to onboard/pay as many subcontractors & suppliers as is feasible through IPEX – this provides developers & lenders with greatest transparency & oversight. IPEX will assist builders with the onboarding of any subcontractor or supplier needing to be paid through IPEX.

The process by which the Builder requests a progress payment remains unchanged. All standard QS approval checks & processes undertaken prior to payment approval also remain unchanged. The key difference is: once the progress claim is approved, the Developer will deposit the progress payment into the IPEX/Macquarie Bank project trust account linked to the project rather than the Builders standard account.

The process by which the builder processes subcontractor & supplier payments is unchanged except for the fact that builders will upload payment file from their accounting software directly into IPEX platform for payment rather than their everyday bank account.

IPEX does not check, approve or in any way interfere with amounts or timing of any payment to any subcontractor or supplier – the builder controls the account. IPEX does limit who can be paid (only those onboarded & linked to the project) however, you are free to pay any onboarded subcontractor or supplier any amount you deem appropriate – to this end, it is entirely possible for you to pay a different amount to the amount claimed i.e. a trade letting win or in the case of an outstanding issue with work performed that needs to be resolved. The standard IPEX developer portal view simply provides visibility on which subcontractors/suppliers have been paid & when (typically reviewed in support of your submitted stat dec), along with a percentage of (builder entered) contract value paid. Provided payees & percentages are in line with expectations, there is generally no further discussion required.

This is very common & can be done 1 of 2 ways: the builder would deposit money into the IPEX account & complete this payment through IPEX (this process also helps to satisfy any client requirements for proving this payment has been made /justifying future claim to reimbursement). IPEX tracks all funds deposited by the builder & this amount can be withdrawn without approval once sufficient funds are in the account i.e. once developer makes their next payment. depending on your agreement & who the specific payment is to (should it be to someone deemed part of prelim costs/direct costs to builder), the builder can also pay outside of IPEX, include within next claim & request reimbursement via withdraw request once developer makes payment.

IPEX works with all accounting software platforms so no need to change the system you are using. IPEX only requires the upload of an ABA File – a standard process all builders should be familiar with. Rather than uploading the ABA File to your normal banking account, you upload the file to IPEX to process payments.

IPEX actively prevents payments to fraudulent companies All Subcontractors & Suppliers submitted via the Builder are onboarded via fully compliant KYC (Know Your Client) & AML (Anti-Money Laundering) protocols, flagging companies with as well as those potentially ‘related’ to the Builder. IPEX actively works to prevent direct payments being made to anyone not involved in the project. IPEX reduces the risk of non-payment in the event of Builder Insolvency Should your Builder become insolvent in the midst of a project, any unallocated funds remain in the IPEX Project Account, allowing the Developer or replacement Builder to step in & process any payment due for work completed. IPEX deters Builders with cash flow issues from bidding in the first place As IPEX prevents project funds being diverted to other projects, Builders who need to ‘buy’ a project will not bid. IPEX encourages contracts being awarded to legitimately priced bids with responsible margins built in which again, greatly reduces the potential for an insolvency event. IPEX holds Retention Funds securely The IPEX platform holds all project payments & retention funds in a separate trust account that can only be distributed to verified Subcontractors, providing a high level of security & transparency in the event that project claims are delayed or disputed.

IPEX payment platform costs are absorbed by Developers. Awarded Subcontractors are not charged for IPEX.

There is no cost to subcontractors for using the IPEX platform.