Payment transparency
Protection for lenders
IPEX
Cost to Complete is missing real construction funding risk
The QS certifies progress, not payments. Although the QS assessment sits at the centre of critical funding decisions each month, the reality is that your Cost to Complete forecast is only as reliable as the ‘stat decs’ behind it.
Certified but unpaid claims are not captured in your forward-looking Cost to Complete forecast, but the exposure is real - this cash is now subject to the builders’ broader liquidity position.
IPEX helps lenders to link progress to payment, allowing funding gaps to be detected before they become defaults.
Project protection
The QS tells you how much work’s been done, IPEX tells you if it’s been paid for
Cost to Complete remains the fundamental metric in construction funding risk reporting, but it has one structural limitation – it recognises costs when progress is certified & assumes that payment to subcontractors & suppliers follows.
Of course, it often doesn’t.
This means that a project may appear on budget even while carrying a significant funding shortfall risk.
We’re not replacing ‘Cost to Complete’ – we’re verifying it.
Cost to Complete reporting remains essential. It’s just missing is a simple verification step.
IPEX is an online payment platform that helps lenders to:
- validate ‘Cost to Complete’ forecasts against actual cash outflow
- identify & resolve subcontractor payment issues before further claims are approved
- detect funding gaps before they become defaults
Using IPEX
Additional benefits for lenders
Reduce risk & automate financial oversight processes when lending into developer-builder projects
“We have many great, long-standing relationships with developer-builders, but there’s no question that this model can add an element of risk for us as financiers. Managing this additional risk can also create a great deal of extra admin for both parties. IPEX allows us to automate payment oversight & integrity checks, delivering better governance, earlier risk detection and enhanced investor confidence.”
Henri Hines
Senior Portfolio Manager
Payment transparency
Builder concerns a thing of the past
A requirement for transparency has often stalled on one argument: “some builders won’t accept it.”
Payment oversight used to mean exposing elements of commercially sensitive information, but that trade-off is no longer necessary.
Subcontractor payment transparency does not require:
- restricting your builders access to project funds or,
- your builder to disclose subcontract values, payment amounts, their margin/letting gains
Payment validation has become a low-friction control over capital deployment and is now practical at scale because it can be implemented without commercial intrusion.
A list of all subcontractors & suppliers that have been linked to the project & that are approved for payment is visible.
Only critical payment information including date of last payment & % of contract paid is visible to the developer / lender.
Contract / payment values & letting gains remain confidential.
$2B+ in funds protected and counting
IPEX software
Additional payment controls for high(er) risk project scenarios
Developers can also negotiate the inclusion of additional payment controls on a project if deemed necessary:
These include:
- removing builder access to subcontractor/supplier entitlements
- requiring developer/lender approval for all builder withdrawals
- requesting open book access for related-party groups or high value subcontracts
- requiring co-approval of all payment files, including amounts paid to subcontractors & suppliers
- blocking further payment to subcontractors & suppliers once they have finished onsite/been paid 100% of their contract
Developer protections and rights
Industry-standard processes
Require the builder to submit a ‘stat dec’ confirming they’ve paid all relevant subcontractors & suppliers
Access to subcontractor & supplier payment information allowing validation of builder ‘stat dec’
Ability to identify non-payment of relevant subcontractors/suppliers before approving subsequent claims
Ability to limit builder access to subcontractor/supplier portion of each progress payment
Make builders’ payment conditional on the ‘on time & in full’ payment of subcontractors & suppliers
Developer right to escalate transparency & control under ‘financial distress’ / payment default events
Developer right to access full account transaction history in a ‘financial distress’ / payment default event
Access transaction history under a ‘Payment Default’ event
- All transactions made via IPEX are documented, providing a clear audit trail should the builder enter administration
- Developers & lenders receive immediate and full details of subcontract values & account transaction history in a payment default/external administration event, allowing prompt execution of an effective remedial response
Testimonials
What our customers have to say
