WORK WITH BUILDERS WHO
PROTECT YOUR PAYMENTS

WORK WITH BUILDERS WHO
PROTECT YOUR PAYMENTS

THE CHALLENGE

Industry processes that put your payment at risk.

THE IPEX SOLUTION

Reduce your risk of non-payment even if your Builder goes under.

THE CHALLENGE FOR SUB-CONTRACTORS

Winning a commercial construction contract comes with the expectation that you outlay for materials & pay your workforce well in advance of receiving any money, with very little protection should things go wrong with your builder or developer.

Even frequently late or partial payments can result in businesses falling behind on their own bills & defaulting on suppliers. Cash flow issues can in turn prevent businesses from bidding on new projects due to the upfront costs associated with winning.

Late payments put Sub-Contractor businesses at risk however, withholding funds often works to the advantage of Developers & Builders.

THE IPEX SOLUTION: IPEX GIVES SUB-CONTRACTORS VISIBILITY OVER PROGRESS PAYMENT PROCESS

IPEX ALIGNS BUILDER GOALS WITH YOURS; THEY ONLY GET PAID WHEN YOU DO

The IPEX Payment Platform limits what Builders can do with Developer funds, ensuring that progress payments are used only to pay approved Sub-Contractors & Suppliers linked to a specific project.
Importantly for Sub-Contractors, IPEX proportionally releases preliminary cost & margin to Builder with every dollar paid out of the IPEX Project Account, giving Builders an active incentive to distribute funds quickly rather than withhold payments.

IPEX ACTIVELY PREVENTS PAYMENTS TO FRAUDULENT COMPANIES

All Sub-Contractors & Suppliers submitted via the Builder are onboarded via fully compliant KYC (Know Your Client) & AML (Anti-Money Laundering) protocols, flagging unregistered/deregistered companies 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.

SUB-CONTRACTOR PAYEE APP

Aside from lowering Sub-Contractor risk, all IPEX projects are tracked via the IPEX Mobile App which provides:

  • Live reporting: amount you have been paid for each IPEX project you are working on
  • Visibility on current Retention Balance for each project
  • Notifications & Tracking when funds have been processed & paid

  

FIND ‘IPEX READY’ BUILDERS TO QUOTE YOUR NEXT PROJECT

‘IPEX Ready’ Builders have an understanding of the IPEX Framework & have indicated that they are willing and able to operate within IPEX payment conditions. Check whether your Builder is ‘IPEX Ready’ or find a new Builder who is!

WHAT SUB-CONTRATORS & SUPPLIERS ARE SAYING ABOUT US

WHO WE WORK WITH

CASE STUDIES

SUB-CONTRACTOR FAQS


  1. IPEX actively prevents payments to fraudulent companies
    All Sub-Contractors & 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.
  2. 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.
  3. 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.
  4. 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 Sub-Contractors, providing a high level of security & transparency in the event that project claims are delayed or disputed.


  1. IPEX aligns Builder goals with yours; they only get paid when you do
    Importantly for Sub-Contractors, IPEX proportionally releases preliminary cost & margin to Builder with every dollar paid out of the IPEX Project Account, giving Builders an active incentive to distribute funds quickly rather than withhold payments.
  2. IPEX gives Sub-Contractors visibility & transparency over payments & project status
    Sub-Contractors appointed to an IPEX project can download the IPEX Mobile App to view project account balances, transaction history & retention balances in real time. Sub-Contractors will also get automatic alerts when a project payment has been processed.
  3. IPEX – Trade Debtors Insurance
    IPEX provides significant protection to Sub-Contractor payments which may reduce the need for trade debtors insurance in some instances.


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



There is a small cost to Sub-Contractors which pays for the verification/onboarding process & payment protection software. IPEX cost to Sub-Contractors is 0.025% ($2.50 per $1000).



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 Sub-Contractor requests a progress payment remains unchanged. All standard QS approval checks & processes undertaken prior to payment approval also remain unchanged.



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 IPEX platform prevents payment to anyone other than approved Sub-Contractors & Suppliers.



IPEX runs each Sub-Contractor registering to receive payments through a series of checks as part of the onboarding process. These checks are performed to help prevent the incidence of fraud. Checks include:

  • Running applicant details through every Government Database to verify identify of Directors
  • Flagging related party entities i.e. shared Director between Main Contractor & an awarded Sub-Contractor
  • Flagging anyone identified as a Politically Exposed Person (PEP), is subject to Government Sanctions and/or is named in any adverse media
  • KYC (Individual) & KYB (Organisation) Fraud Checks
  • Anti-Money Laundering Risk Assessment

The Developer will be notified of any item that raises doubt re: status of a Sub-Contractor entity.



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.



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 & the Developer can then facilitate direct payment to approved Sub-Contractors & Suppliers.



Retention rates and caps are 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. The Builder can see current retention balances but cannot use these funds.



Sub-Contractors can apply to have retention funds released when contract obligations have been completed. Assuming the Builder has not raised any dispute to this request within 14 days, the funds will automatically be released back to the Sub-Contractor.



IPEX’s platform provides an overview & history of all payments distributed & retention funds held across any IPEX project you are appointed to.



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.



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.



The Project Trust Accounts are held with Macquarie Bank.



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/


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