Industry standards
IPEX goes builder-friendly
Industry-standard processes are failing...
Even when relationships are strong and track records are solid, builders are continually required to ‘prove’ they’re financially sound and of course, ‘prove’ that they pay their subbies.
The problem is, the industry standard checks don’t actually ‘prove’ anything.
Builders are still passing due diligence while ‘insolvent’ and, how many false ‘stat dec’s are signed in the months before a builder goes under?
You may have a strong balance sheet and pay your subbies on time, but every other builder is making the same claim, including those in deep financial trouble.
‘Best practice’ is changing; new ‘checks’ will soon become standard
It’s becoming common for developers (and lenders) to want additional checks/processes to better protect their projects. We’ve seen all of the below proposed on projects in the past few months:
- intensified ‘stat dec’ requirements (holding individuals liable and more)
- joint/escrow account structures and
- monthly builder account audits
Of course, ‘isolating’ each development from all others is fast becoming the preferred approach. Not only is IPEX acceptance now a primary driver of builder selections for an increasing number of developers, IPEX is also now being mandated as a condition of funding a project by several major non-bank lenders.
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Developer/lender IPEX adoption continues to grow...
IPEX allows developers to cross-check the QS assessment with actual payment data.
The ability to identify non-payment of subcontractors before approving the next claim removes a major development risk.
This is why IPEX acceptance has become a primary driver of builder selection for many developers and lenders.
Developers can view subcontractors and suppliers that have been linked to the project and that are approved for payment.
Developers can see which subcontractors and suppliers have been paid, date of last payment and % of contract paid - account balances subcontract / payment values and builder margins are concealed and can't be reverse engineered.
IPEX goes builder-friendly
- Although subcontract values, payment amounts & builder margins are hidden from the developer/lender as standard, IPEX Monitor takes this a step further by removing all account withdrawal restrictions.
- Builder prelims, margin and additional letting gains can be withdrawn from the project account without developer oversight.
- Importantly, a willingness to work under IPEX Monitor is likely to be sufficient to strengthen developer/lender relationships and remain in the box seat for upcoming projects.
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IPEX software
IPEX Monitor vs IPEX for builders
Whilst IPEX lowers risk for developers, lenders and subcontractors, it also offers advantages to ‘good’ builders.
From attracting trades to the potential for cashflow support, IPEX is now being used strategically by builders looking for a competitive edge in a tender, and to strengthen key client relationships.
Prove your financial health and reduce client/lender risk to increase your chances of winning the contract
Deter ‘financially distressed’ competitors from tendering
Withdraw prelims, margin and letting gains without developer oversight
Subcontract values, payment amounts and your margin can remain confidential
Supports fairer payment terms for builders, including cash in advance for site establishment/certain supplier deposits
Helps to attract trades in competitive markets by reducing non-payment risk
Additional benefits
- Interest is earnt on account/retention balances at market rates.
No change to subcontractor claim, builder claim or QS assessment processes.
No change in accounting software or process; just upload the ABA file to IPEX rather than your operational account.
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