While most of the headlines are focused on late payment reform, another – quieter but equally important – consultation has just wrapped up. The Government asked a simple but far-reaching question: Should e-invoicing be mandatory in the UK? And if so, how should it work?
For construction leaders, this is more than a policy update. It’s a chance to get ahead of the curve - and turn compliance into competitive advantage.
Why e-invoicing deserves your attention
The consultation, led by HMRC and the Department for Business and Trade, laid out a compelling case for e-invoicing. It’s not just about digitising paperwork - it ’s about fixing the underlying inefficiencies that slow down payments and increase risk.
E-invoicing promises:
- Fewer invoice errors
- Better visibility and tracking
- Faster payments
- Lower fraud risk
- Easier tax reporting
The Government also explored models like PEPPOL (already mandatory for NHS suppliers) and decentralised “four-corner” networks that let buyer and supplier platforms talk to each other.
The takeaway? Digital exchange and standardised data aren’t just coming - they’re inevitable. Whether or not the mandate goes ahead, the direction is clear.
Don’t wait for a legal deadline
Even without a formal mandate, the pressure to digitise is already building. Large companies are now required to report on their payment practices, including whether they use digital invoicing. And with new rules around statutory interest and dispute resolution windows, manual processes are becoming a liability.
Boards, auditors, and procurement teams are starting to ask tougher questions:
- What percentage of invoices are digital?
- How many go straight through without manual intervention?
- Are disputes resolved within the 30-day window?
In other words, it’s not just about when you pay — it’s about how you pay. And if your systems are still relying on PDFs and email chains, you’ll stand out for the wrong reasons.
Construction’s core problem: bad data
In our recent webinar, we dug into the root causes of payment delays in construction. The verdict was clear: bad data is the real problem.
We saw examples like:
- Mismatched units between orders and invoices
- Missing product identifiers
- Ambiguous site codes
- Late or missing receipting
E-invoicing won’t fix these issues overnight – but it forces the conversation. It creates structure, demands consistency, and rewards clean data with faster approvals and stronger compliance.
For construction firms, this is a golden opportunity to unlock real operational efficiency.
How to make real progress in 90 days
You don’t need to wait for legislation to start improving. In fact, the best-performing contractors are already moving. Here’s a practical roadmap to get started - and show results by the end of the quarter:
- Set clear data standards – every invoice should include key fields like PO number, product ID, unit of measure, site reference, and tax details.
- Enforce those standards during supplier onboarding and catalogue management.
- Fix receipting – treat it as the critical linchpin of your three-way match process.
- Choose an exchange model that supports decentralised standards (e.g. PEPPOL).
- Build in assurance – implement supplier ID checks, audit trails, and traceability.
- Update your reporting – show invoice digitisation alongside aged debt and payment performance.
By the end of this quarter, “good” should look like:
- A signed-off payment policy aligned with the 60/30 rules
- Digital invoicing KPIs in board reports
- Receipting live in key categories
- A rising straight-through processing rate
- Fewer anecdotal delays – and more data-led insights
Construction-specific watch points
There are a few areas where construction firms need to pay extra attention:
- Retentions are under review – these could be abolished or locked into protected accounts. Either way, it’s time to model the impact on your cash flow and contracts.
- Public sector contracts will require 45-day average compliance from 1 October 2025 – If you wait until bid stage to address this, you may end up on the back foot.
The takeaway for leaders
Standardisation. Interoperability. Automation.
These aren’t just policy buzzwords – they’re the new baseline for doing business. For contractors willing to lean in now, e-invoicing and receipting aren’t compliance burdens. They’re a chance to unlock speed, control, and competitive edge.
The firms that act early won’t just meet the standard — they’ll set it.
To find out more about how Causeway can support you on this journey, contact us today.
