How to pay subcontractors on site: a practical guide

Ensure your site payments are auditable and compliant. This guide covers the 6-step workflow for verifying work and managing subcontractor invoices effectively.

By James Shorter ·

How to pay subcontractors on site: a practical guide

Site manager hands entering payment on tablet

To pay a subcontractor correctly, you need to do five things in order: accept the invoice, verify the work against your schedule of values or variation reference, capture timestamped photo evidence, complete a signed approval form, and issue a payment instruction to accounts. That sequence creates an auditable record every time.

Before you leave site, tick these three items:

  • Signed approval with approver name, role and timestamp
  • At least one timestamped photo of the completed work
  • Invoice attached to the approval record (paper folder or project entry)

Store the completed form and evidence in your project record, whether that is a named folder or a BRCKS project entry, so accounts and auditors can find everything in one place.

Key takeaways

A clean subcontractor payment requires three things above all: a signed, timestamped approval, the invoice number on every record, and the transaction reference filed the day payment clears.

Point Details
Three-way match is mandatory Tie every invoice to proof of work and a signed approval before instructing payment.
Three non-negotiable audit fields Approver name and timestamp, invoice number, and transaction reference must appear on every payment record.
Evidence on the day Collect timestamped photos and delivery notes before leaving site, not retrospectively.
Retention needs its own record Log retention held at each interim payment and link it to the release checklist for final account.
BRCKS centralises the workflow Site managers, QSs and accounts work from one versioned project record with approvals and attachments already filed.

Table of Contents

How to pay subcontractors: a 6-step on-site workflow

The construction payment cycle runs from invoice submission through verification, certification and payment. Follow these steps in order and you will have a clean audit trail every time.

  1. Receive and log the invoice. Note who submitted it, the date received and the method (email, post, hand-delivered). Assign it an internal reference immediately.
  2. Verify scope and quantities. Check each invoice line against the schedule of values or the variation reference number. Flag any line that exceeds the agreed value before going further.
  3. Inspect completed work and collect evidence. Walk the work, take timestamped photos and collect delivery notes, timesheets or a signed completion checklist.
  4. Fill the invoice-approval form. Capture all mandatory fields (listed in the templates section below). Attach photos and documents to the form before signing.
  5. Route for approval and record the sign-off. The site manager or QS signs, with their name, role and the exact timestamp. If the approver is off site, a digital signature with a date stamp is sufficient.
  6. Issue the payment instruction to accounts. Send the instruction with the invoice, approval form and evidence attached. Record the transaction reference once payment is made.

Pro Tip: Set a fixed day each week to process subbie invoices. Batching approvals on the same day keeps the rhythm predictable for subbies and reduces the number of payment queries you field.

What to check on site before you approve an invoice

Disputes almost always trace back to an approval that was waved through without checking the detail. The Oracle Textura billing workflow structures this as tabbed checks covering progress, stored materials and retention. On site, work through these before you sign anything:

  • Invoice lines vs. schedule of values. Each claimed line must sit within the agreed value. Cross-reference the latest variation log for any additions or omissions.
  • Delivered materials and completed tasks. Match delivery notes to invoice lines. For labour, check timesheets or a signed completion certificate.
  • Retention and previous payments. Confirm that retention is correctly deducted and that cumulative payments to date do not exceed the committed contract value.
  • Variation references. Any work outside the original scope needs a variation reference number. Do not approve a line without one.
  • Sign-off fields. Record the approver’s full name, role, date and time, and whether the work passed or requires correction before payment.

Pro Tip: Keep a printed or digital copy of the variation log on site. When a subbie claims for extra work, you can check the reference number in under a minute rather than chasing the office.

Which evidence do you need to collect on site?

A signed approval alone is not enough. The three-way match requires you to tie the invoice to proof of delivery or completed work and to the approver’s signature. Collect all of the following:

  • Timestamped photos with location context (show the completed element, not just a general site shot)
  • Delivery notes signed by the person who received the goods
  • Timesheets or daily allocation sheets for labour
  • Signed completion checklist or handover certificate
  • Copies of relevant RFIs or variation instructions that authorised the work

File-naming convention: use the format PROJCODE_SUBBIE_YYYYMMDD_TYPE_REF for every file. For example: BHAM01_JONES_20260610_PHOTO_VAR003.jpg. This makes retrieval instant and ties each file to a specific payment event.

Attach each piece of evidence to the relevant invoice line or variation record, not just to the top-level project folder. That attachment discipline is what makes a three-way match auditable rather than theoretical.

Pro Tip: Take two photos minimum per payment: one showing the work in context and one showing the detail (a joint, a finish, a meter reading). A single wide shot rarely satisfies an auditor or a client query.

Gloved hand photographing brickwork detail

How to record payments and build an audit trail

Every payment record needs the same core fields so accounts can reconcile without phoning site. Centralised valuation and variation logs with logged approvals prevent missed deadlines and make reconciliation straightforward.

Mandatory audit fields for each payment:

Field What to capture
Approver name and role Full name and job title of the person who signed off
Approval timestamp Date and time of sign-off (not just the date)
Invoice number and date As printed on the subcontractor’s invoice
Contract or variation reference SOV line or variation number authorising the work
Net amount claimed Before retention
Retention held Amount and cumulative total to date
Gross amount approved Net minus retention
Payment method BACS, Faster Payments, CHAPS or cheque
Transaction reference Bank reference once payment is made
Attachments list File namesof every document attached

Keep one immutable record per payment. Version it if corrections are needed rather than overwriting the original. Document control that preserves versions is what separates a defensible audit trail from a folder of loose files.

Practical payment methods and how to evidence each one

For day-to-day subbies, BACS or Faster Payments is the standard. CHAPS suits same-day, high-value settlements where timing matters. Cheque is still contractually required on some older agreements but avoid it where you have a choice: clearing time adds days and the paper trail is harder to manage.

  • BACS / Faster Payments: save the bank remittance or payment confirmation email. Note the transaction reference and the value date.
  • CHAPS: request a same-day confirmation from your bank and attach it to the payment record immediately.
  • Cheque: retain the cheque stub and a copy of the signed receipt from the subcontractor. Log the cheque number as the transaction reference.

Annotate each piece of payment evidence with the invoice number and approval reference before filing it. That annotation is the link that closes the three-way match. Large contractors use e-invoicing and automatic invoice matching to cut manual reconciliation work. For public contracts, the Procurement Act 2023 guidance requires contracting authorities to accept standardised electronic invoices; where no other payment term is specified, an implied 30-day payment period from the date of receipt of a valid invoice commonly applies, but you should check the guidance for specific exceptions.

Pro Tip: Add the transaction reference to the payment record the same day the payment clears. Leaving it until month-end means chasing bank statements under pressure.

How to handle retention and final account sign-off

Record the retention amount on every interim payment record, not just the final one. Keeping retention calculations visible on each payment and linking them to the release checklist makes final account sign-off a single, auditable action rather than a reconstruction exercise.

Retention release conditions to verify before releasing funds:

  • All defects from the snag list have been rectified and signed off
  • A completion certificate or practical completion notice has been issued
  • Final inspection evidence (photos, checklist) is attached to the project record
  • Client sign-off obtained where the contract requires it

Final account sign-off steps:

  1. Confirm the final certificate has been issued and is on file.
  2. Issue the retention release instruction to accounts with the release conditions evidenced.
  3. Update the project financial ledger to show nil retention outstanding.
  4. Archive all payment records, approvals and attachments against the closed project.

JCT-style contract management requires retention and variation logs to be kept in one workflow so payment notice and certification deadlines are not missed.

Practical templates: invoice-approval form and payment instruction

Invoice-approval form fields

  • Project code and project name
  • Subcontractor name and company
  • Invoice number and invoice date
  • SOV line or variation reference
  • Net amount claimed, retention deducted, gross amount approved
  • List of attachments (photos, delivery notes, timesheets)
  • Approver name, role and signature
  • Approval timestamp
  • Pass / correction required checkbox with notes

Payment instruction fields

Field Notes
Payee name As on the subcontractor’s bank account
Sort code and account number Verify against the subcontract agreement
Payment reference Invoice number or project code
Amount Gross approved amount
Payment method BACS / Faster Payments / CHAPS
Requested payment date Allow for BACS processing time if applicable
Authorised by Name and role of the approver
Sent to accounts by Name of the person issuing the instruction
Attachments Approval form, invoice, evidence files
Transaction reference Complete once payment is confirmed

Subcontractor-order software can generate these fields automatically from the schedule of values, reducing re-entry. For teams not yet using dedicated software, a shared folder with a consistent naming convention and these two forms covers the basics.

How BRCKS supports the subcontractor payment workflow

BRCKS maps directly to each step of the workflow described above. Site managers log invoices and valuations as project entries, attach photos from the site diary app with automatic timestamps, and record variation references against the relevant log. Approvals are signed digitally with the approver’s name and timestamp captured automatically.

  • Site manager: logs the invoice, takes photos via the checklist, ticks the approval and sends the payment instruction to accounts, all from a phone on site.
  • QS: reviews the variation log and schedule of values in the same record, adds notes and countersigns where required.
  • Accounts: receives the payment instruction with all attachments already filed, transaction reference added once paid.

The result is a versioned, searchable project record where every payment has its approval, evidence and transaction reference in one place. Digital workflows replace the scattered WhatsApp threads and spreadsheets that make reconciliation slow and disputes hard to resolve.

Pro Tip: BRCKS saves site teams 30+ minutes a day on admin. Use that time to walk the work before signing off, not to chase paperwork.

The simplest approval routine that actually works on a busy site

The sites where subbies get paid on time and disputes stay rare tend to share one habit: the site manager checks the invoice, takes two photos, ticks the approval form and sends the instruction to accounts before leaving site that day. Not at the end of the month. Not when the subbie chases. That day.

Doing this once a week per draw, or per milestone, means accounts always has what it needs and subbies are not left waiting on a query that could have been answered on site in two minutes. The paperwork is not the burden. The chasing is.

BRCKS keeps your subcontractor approvals in one place

Every step in this workflow, from logging the invoice to filing the transaction reference, can be completed inside BRCKS without switching between apps or hunting through email threads. Subbies and clients are invited free. Core team seats are £40 per seat per month billed annually.

BRCKS

BRCKS gives site managers, QSs and accounts a single project record with timestamped photo evidence, signed approvals, variation logs and payment instructions all attached and searchable. No spreadsheets. No lost PDFs. Start a 14-day free trial at Brcks and run your next subcontractor payment through it.

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FAQ

What is the correct process for paying a subcontractor?

Accept the invoice, verify the work against the schedule of values or variation reference, collect timestamped photo evidence, complete a signed approval form, and issue a payment instruction to accounts with all documents attached.

What evidence do you need before approving a subcontractor invoice?

At minimum: timestamped photos of the completed work, delivery notes or timesheets, and a signed completion checklist. These three items support the three-way match of invoice, proof of work, and approver signature.

When should a subcontractor be paid?

Payment timing depends on the contract terms. For many public contracts, the Procurement Act 2023 guidance implies a 30-day payment term from receipt of a valid invoice where no other term is specified.

How do you handle retention when paying subcontractors?

Deduct the agreed retention percentage at each interim payment and record the cumulative total on every payment record. Release retention only once defects are rectified, a completion certificate is issued, and final inspection evidence is attached to the project record.

How does BRCKS help with subcontractor payment records?

BRCKS logs invoices, variation references and signed approvals with automatic timestamps, attaches photos and documents to each payment entry, and stores everything in a versioned, searchable project record that accounts and auditors can access without chasing site staff.

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How BRCKS Can Help

Streamlining subcontractor payments is essential for maintaining momentum on site and building lasting professional relationships. BRCKS simplifies this process by integrating automated workflows and real-time tracking directly into your project management routine, ensuring every payment is accurate and punctual. By reducing the administrative burden, BRCKS allows your team to focus on delivery rather than paperwork. We invite you to explore our platform today to see how we can transform your financial operations and keep your projects moving forward. Learn more at BRCKS and explore our full feature set.


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