Orders for goods and services are placed following an approval process. Deliveries are recorded by the receiving Project or Department and processed by the responsible accounts’ person, for Projects, a person usually based at the Project location. All physical deliveries must be supported by either a hard copy or electronic validated (signed), Goods Received Note.

Invoices should be addressed to the correct business name (normally Costain Ltd but will be different for Joint Venture projects), and be sent to the address on the purchase order and quote the full order number. Projects and offices typically have a specific email address for receiving invoices which should be quoted on the purchase order. A hard copy by post is not required if an email address is quoted.

Costain has a three-way matching process when processing most invoices into its accounting package. The exceptions largely being supplies not involving deliveries.

Any discrepancy with an invoice that prevents processing should be advised to the supplier within 7 working days.

Standard suppliers are paid following reconciliation to the supplier’s statement, which should be addressed to Costain’s Maidenhead office or, preferably, sent by email to [email protected]

Payment runs are prepared weekly and include all processed and reconciled invoices with payments made by BACS following signatory signoff.

Payment terms vary and are normally agreed with suppliers but where specific agreement is not reached default terms of 30 days will apply. Payments are all based on supplier invoice date and frequency of payment to suppliers will vary between the following:

• 21 days: specific to certain suppliers, weekly payment runs will include invoices on these terms once processed,
• 30 days (the most common term and default): weekly payment runs will include invoices due up to payment date in line with terms,
• 45 days: agreed and applied only to suppliers generating large invoice volumes and paid twice monthly.

Payment runs include all invoices processed that fall due up to and including the funds transfer date.

Subcontracts approved by the project team are paid to terms on weekly payment runs. Where specific projects have trust bank accounts, suppliers are paid according to the trust deed for that bank account once the normal processing has been completed. Costain is aiming to pay 95% of invoices within 60 days and all invoices within agreed terms. Recently this has not been achieved due mainly to default payment terms that were outside of these parameters and due to the high number of invoice queries raised but not resolved within sufficient time to pay to these parameters.

An improvement plan has been produced and put in place to improve performance from current levels and payments data is monitored to check plans are generating the targeted results. This plan includes making process changes in the invoice to payment cycle, identifying where further resource might be required and encouraging our suppliers to assist with making the end to end process more efficient. This plan is subject to director level review and ongoing monitoring. To date there has been significant improvement in the performance of payment within 60 days up to the required level and payment to terms.

Where a supplier has an invoice query, in the first instance this should be addressed to the Project or Department noted on the purchase order. If a query turns into dispute, resolution will be achieved by reviewing with all relevant parties. This may include the projects and suppliers’ teams, supply chain, procurement, commercial, accounts and accounts payable.

For major suppliers and subcontractors, Central procurement will likely be involved and, where necessary, members of management.

If an agreement is not possible, potential dispute resolution methods may be used, most commonly, mediation or adjudication. If it remains impossible to reach agreement, the dispute may go to litigation.

Costain Limited - joint venture contracts

Joint ventures operate in a similar manner to the above, but all processing and payments are performed by the project accounting team. All documentation should be sent to the project address for the accounting team along with any queries.