IPEX is an online payment platform that secures funds intended for a project, protecting Developers and Sub-Contractors in the event of Builder insolvency.
IPEX software integrates with a dedicated construction project bank account to ensure that progress payments are used only to pay approved Sub-Contractors & Suppliers linked to that specific project. IPEX provides Developers with visibility over who has been paid & when, without sharing a Builders’ commercially sensitive information.
Whilst IPEX protects Developer & Sub-Contractor payments, it also helps financially secure Builders to validate their money management practices, differentiating their bid from competitors in the process.
The IPEX Payment Platform provides Developers & Lenders with:
Builders log onto the IPEX portal to view Project & Trust Account balances, set Sub-Contractor/Supplier contract values & retention percentages & distribute all payments. Builders can also request payments for preliminary costs and any additional margin they may be entitled to.
There is no cost to Builders for using the IPEX platform.
IPEX payment platform costs are shared by Developer & the awarded Sub-Contractors. Costs are extremely low considering the level of payment protection that IPEX provides to each.
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 Macquarie Bank project trust account linked to the project rather than the Builders standard account. The Builder will be alerted once transferred funds have cleared & are ready for use.
The process by which the Builder processes Sub-Contractor & Supplier payments is unchanged except for the fact that Builders will upload payment file from their accounting software directly into IPEX platform for payment. The Sub-Contractor will be alerted once they have been paid.
The Builder will be automatically paid the agreed prelim & margin as a function of the amount paid out to verified Sub-Contractors & Suppliers. For example, if the agreed margin is 5%, the Builder will be automatically paid $5K for every $100K paid to Sub-Contractors and/or Suppliers. Should the Builder have preliminary costs approved by QS but not associated with a sub-contractor payment, these can be claimed in full via the IPEX ‘redraw’ function within the Builder portal. Additional margin can also be claimed via the ‘redraw’ function.
Standard operation of the IPEX platform allows Developers to see which Sub-Contractors & Suppliers have been paid & when, but not how much. Developers & Builders may agree to open book terms which would allow full transparency however.
Finally, should a Builder default on payment or enter administration, before practical completion of the project, ownership of the project trust account is transferred to the Developer, at which point all values will be visible.
Retention rates and caps can be set through IPEX. Retention money is automatically collected at pre-determined rates (typically 10% of each payment with a cap at 5% of total contract value) & is set aside in a separate trust account.
A Project Trust Account is an account through which all payments required by the construction contract are received and paid. Project Bank Accounts are now a legislated compliance requirement for many projects in Queensland & an increasingly used payment process on tenders nationally.
Builders will earn interest on money held in the Project Trust Accounts at competitive market rates.
The Project Trust Accounts are held with Macquarie Bank.
IPEX is a tool that, if used correctly, will assist Builders to meet their obligations under the new QBCC framework. Project Bank Accounts are now a compliance requirement for many tenders in the construction industry. IPEX provides a solution that helps head contractors meet all these compliance requirements to industry standards simply and efficiently.
Increasing compliance measures and legislations relating to project payments and claims bring more stringent requirements for financial management, which can further complicate things. Our online platform makes it easy to keep track of multiple projects storing all project payment information, project funds and documentation. As a project bank account, IPEX provides a solution that simplifies project payments to contractors so you can focus on what you’re good at: getting the build to completion on time and within budget.
Unlike a standard project trust account, the IPEX Payment Platform has an additional layer of security, which prevents the use of funds for anything other than payment of approved Sub-Contractors & Suppliers. Whilst there are penalties associated with doing so, there is nothing physically stopping the improper movement of funds out of a regular project trust account, limiting the level of protection it offers Developers/Lenders & Sub-Contractors/Suppliers. This added layer of protection is what gives Builders a significant advantage when in negotiations for a new contract.
IPEX is working with NCC Group, a global cyber security organisation, to ensure our technical solutions, processes, procedures and staff are at an appropriate level of cyber maturity. We will continue to enhance our privacy program to ensure our clients & customers receive the highest level of end-to-end security across the full data lifecycle, assured that IPEX is embedding privacy by design and default to meet and exceed any privacy obligations.
To learn more about NCC Group, please visit: https://www.nccgroup.com/au/