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Contractor
Contractor payment delays: a payment
systematic review of current delays

trends and future directions

Ebenezer Adaku, Victor Osei-Poku, Jemima Antwiwaa Ottou and
Adwoa Yirenkyi-Fianko Received 15 December 2022
Department of Management Science, Revised 23 January 2023
Ghana Institute of Management and Public Administration, Accra, Ghana Accepted 23 January 2023

Abstract
Purpose – The phenomenon of delayed payment to contractors, particularly in the construction industry, is
a vital one and has implications for the health of economies of both developing and developed countries.
However, the knowledge of this phenomenon seems patchy and scattered. This paper aims to provide a
comprehensive overview of the knowledge on the subject matter with directions for future research.
Design/methodology/approach – A systematic literature review coupled with a scientometric analysis
was used to identify the main strands of delayed payment to contractor research as a basis for qualitative
analysis and directions for future investigations.
Findings – Current trends of delayed payment to contractor research are categorised into five broad themes,
namely: causes, effects, mitigation measures, ethical and law and regulatory issues. On the basis of these
themes, directions for future research are proffered.
Originality/value – To the best of the authors knowledge, this is the first attempt at providing a
comprehensive and an integrated knowledge on delayed payment to contractor research with pointers for
further investigation and policy directions.

Keywords Construction industry, Systematic literature review, Contractors, Clients, Scientometric analysis,
Delayed contractor payment
Paper type Literature review

1. Introduction
Delayed payment is an endemic phenomenon in the construction industry, particularly in
developing economy environments. It creates liquidity and cashflow challenges for
businesses, leads to financial instability, growth complications (European Union, 2017) and
in some cases bankruptcy (Rogowski, 2017a, 2017b).
The construction industry contributes significantly to the socio-economic development of most
countries (Alaloul et al., 2021), however, the devastating effects of delayed payment on the industry
continue to be a major challenge that needs urgent diagnosis and resolution. The 2018 European
Payment report indicates intentional late payment to contractors at a rate of 48%, 55% and 63%
in 2018, 2017 and 2016, respectively, in the European areas. In the USA, a survey conducted by
Rabbet Partners and Procore in 2019 revealed an estimated cost of $64bn as a result of slow or
delayed payments in the construction industry (Rabbet Partners and Procore, 2019). The global
media space is inundated with reports of delayed payments and its effects on contractors
(European Union, 2020). A major example that shocked the UK construction industry is the Construction Innovation
collapse of Carillion, a giant construction company in the UK, that led to 750,000 job losses in its © Emerald Publishing Limited
1471-4175
supply chain as well as financial losses of over 300,000 subcontractors (Neate and Davies, 2018). DOI 10.1108/CI-12-2022-0317
CI This evidence highlights the need to understand how contractors cope in situations of delayed
payments and whether those coping strategies are sustainable enough to avoid future disasters in
the construction industry.
This unpleasant phenomenon is not exclusive to developed economies but even worse in
developing economies. Delayed payment, a common feature in most developing economies, is on
the ascendency with its domino effects on the entire supply chain of the construction industry
(Yunianto and Rarasati, 2021; Peng and Lu, 2021; Ansah, 2011). For example, the Ghanaian media
space is constantly overwhelmed with calls by contractors on delayed payments. Specifically, there
have been calls by Road Contractors Association Ghana (Lartey, 2022), Ghana Chamber of
Construction Industry (Ogbodu, 2022), Association of Building and Civil Engineering Contractors
of Ghana and the Association of Conscientious Public Sector Contractors (Dzorgbenyo, 2019) to
address the delayed payment challenge.
The ramification of this challenge transcends the construction industry and businesses to
the entire economy of a polity (Rogowski, 2017a, 2017b). Prompt payment enables contractors
to plan and execute their activities effectively and efficiently without compromise. Munaaim
et al. (2007) indicated that prompt payment of contractors contributes to project success.
Timely payment will ensure consistent positive cashflow that leads to delivery of projects on
time, within budget and at an acceptable level of quality.
Some scholars (for example, Ren et al., 2008; Sambasivan and Soon, 2007) have indicated the
negative effects of delayed payment on the cashflows of construction businesses. The negative
net cashflow of contractors leads to: unpleasant chain effects down the construction supply chain
(Carmichael and Balatbat, 2010; Uher and Brand, 2018); unsuccessful or abandoned projects; and
day-to-day operational disruptions (Ren et al., 2008; Sambasivan and Soon, 2007). Furthermore,
other researchers (for example, Asquin et al., 2010; Brenda and Steve, 2006) argue that delayed
payment can lead to “potentially devastating psycho-social outcomes” and stress on human
elements in construction businesses.
Over the last decade, the interest in delayed payment of contractors has grown,
culminating into publications by several scholars (for instance, Huang et al., 2022; Hazizi
et al., 2020; Samaraweera et al., 2019; Šalamon et al., 2015; Mohd and Ismail, 2014; Nor et al.,
2014; Paul et al., 2012; Enshassi et al., 2012). However, knowledge on delayed payments in
the construction industry is scattered and does not seem to provide consolidated information
on the phenomenon, the existing gaps and direction for future research.
This study, thus, aims to provide a comprehensive overview of research in the area to
establish knowledge themes as a basis of offering directions for future research and to
extend the frontiers of knowledge in the field.
The study is structured into six sections. Section 1 introduces and provides the
motivation for the study. In Section 2, the approach to conducting the study is indicated.
Results of the study are discussed in Section 3. Section 4 discusses the thematic areas of
contractor delayed payment research, whereas Section 5 offers directions for future studies.
Section 6 concludes the study.

2. Review methodology
To examine the state of a specific research area and its existing studies effectively and
sufficiently, a systematic analysis of academic publications in the field is essential (Tsai and
Wen, 2005). The review considered published articles and conference papers as a result of
their quality (Webster and Watson, 2002).
A three-stage systematic literature review process was used following the example of
notable studies (for instance, Che Ibrahim et al., 2022; Moshood et al., 2021; Adaku et al.,
2021) This included:
  identification of database and academic papers; Contractor
 selection of target papers; and payment
 assessment of target papers. delays
A framework for the process is indicated in Figure 1.

2.1 Stage 1 – identification of databases and academic papers

Two databases (Scopus and Dimensions) were relied upon to identify construction delay
payment related articles. Many construction management research and review papers have
used the Scopus database (for instance, Egwim, 2022; Yi and Wang, 2013; Serenko and Jiao,
2012) because of its comprehensive coverage of diversified publications (including
engineering, accounting and management) and accuracy (Zubo et al., 2017). Similarly,
Dimensions, is an integrated database with high-quality scholarly works spanning the

Search Engine
databases and academic papers

Scopus and
Title-Abstract-Keywords
Stage 1- identification of

Dimensions Databases
Search
Keywords: 8 delay
payment search words
Articles identified
(n = 1776)
Exclusion Criteria
Articles with incomplete
records, duplication,
Articles post 1st screening dissertation/thesis, and
papers in press
(n = 342)

Inclusion criteria
Stage 2 – Selection of target

Delayed payment to
contractors
Articles post 2nd screening
papers

(n = 74)

Articles through Forward

and Backward citation
(n = 11)
Articles post 2nd screening
(n = 85)
Assessment of
target papers
Stage 3 -

Articles for scientometric

analysis Qualitative Figure 1.
Discussion Systematic literature
(n = 85) review process
CI general research spectrum (i.e. academic, commercial and policy) at cost free to the research
community (Stahlschmidt and Stephen, 2020).
The search descriptors used in both databases included “delay payment”, “payment
delays”, “nonpayment”, “late payment”, “project payment delays”, “contractors payment
delays”, “certificate payment delays” and “project funding delays”. All papers with these
specific strings of terms in the title/abstract/keywords were pre-qualified to be part of the
study. Furthermore, the search was confined to subject area such as engineering, business,
management, environment, social sciences and finance with document type articles, review
or conference proceedings. The full search code is as follows:
TITLE-ABS-KEY (“delay payment” OR “payment delays” OR “nonpayment” OR “late
payment” OR “project payment delays” OR “contractors payment delays” OR “certificate
payment delays” OR “project funding delays” AND DOCTYPE(“ar” OR “re” OR “co”) AND
PUBYEAR > 2001 AND PUBYEAR < 2023 AND LANGUAGE(“ENGLISH”).
The search code above produced 843 of published papers from Scopus and 933 from
Dimensions databases and were retrieved from 19 to 20 August 2022, respectively. These
covered published papers from 2002 to 2022. Additional limitations were applied to screen
away dissertations, duplications and papers with incomplete details and articles in press
(Table 1). The screening produced 342 papers for further analysis.

2.2 Stage 2 – selection of target papers

At this stage of analysis, screened and target papers’ titles, abstracts, keywords and full
contents were thoroughly assessed to ensure they met the inclusion criteria and that only
relevant and specific papers related to delayed payment to contractors are validly selected
for further examination. Hence, all unrelated papers in respect of the study’s scope were
excluded (as depicted in Table 1 and Figure 1).
According to Haddaway et al. (2022), to achieve robust systematic reviews, supplementary
methods of searching for articles are relevant to explore other relevant articles that were not
identified from the initial bibliographic databases. Forward and backward citation network
was adopted to close any loophole (Hinde and Spackman, 2015). This resulted in the use of
text-based searches in the title, abstract and keywords (Briscoe et al., 2020).
This citation method also resulted in 11 more papers meeting the criteria for the study,
thereby summing the final papers for assessment at 85. The sample size of 85 papers
finalised for the study is substantially adequate for a quality overview of delayed payment of
contractors. This is justifiable comparative with other published works (systematic review)
including 101 articles of decision-making construction projects (Radzi et al., 2021), mental
health among construction professionals with 60 articles (Tijani et al., 2021), 32 articles on
impacts of epidemics outbreaks and supply chains (Queiroz et al., 2020) and construction
workers’ health and safety in India with 64 articles (Chellappa, 2020).

No. of excluded
Stage Exclusion criteria materials

1 Papers with incomplete records/details 475

Table 1.
Papers with duplicates 123
Exclusion criteria for Dissertation/thesis 457
Stages 1 and 2 Articles in press 379
bibliographic search 2 Delayed payment papers in other domains (finance, credit, medical, sales, 268
analysis manufacturing, etc.)
2.3 Stage 3 – assessment of target papers – scientometric analysis Contractor
The final stage of the review (assessment of target papers) adopted the scientometric analysis payment
which is the application of quantitative and qualitative assessment and intercomparison of
scientific products or scholarly works (Hassan and Loebbecke, 2016). It assesses academic
delays
works by focusing on co-authorship, co-citation, co-occurrences, bibliographic coupling etc.
using common databases such as Dimensions, Scopus, WoS and PubMed. (Che Ibrahim et al.,
2022; Eck and Waltman, 2014).
A common software for a scientometric analyses is the VOS Viewer (Eck and Waltman,
2014). In this study, the VOS Viewer was used for the analysis of the target papers as used in
similar studies (for example, Chellappa, 2020; Che Ibrahim et al., 2022).

3. Results and discussions

3.1 Growth and trend of delayed payment publications
The publication years of the 85 published papers used for this review were summarized to
study the growth trend of delayed payment over the period from 2002 to 2022. Within the
period under review, 2003, 2006 and 2013 recorded zero (0) publication (Figure 2).
Furthermore, as can be seen (Figure 2), the first half of the study period (2002–2012) saw
limited scholarly investigations on delayed payment in construction, with an annual average
publication of two papers. However, there was a sharp rise in publications from 2013 until 2021.
Scholars from varied geographical locations such as Malaysia, Sri Lanka, China and UK topped
in publications of delayed payments in construction (Table 2). Majority of the publications
occurred in 2021 with 14 publications (Figure 2). The sharp rise in publications can be attributed
to the global economic shock caused by COVID-19 (Gara et al., 2022) which changed world
priority spending areas. Fifty-six percent of analysed scholarly works were published in the last
six (6) years indicating heightened interest in the subject in recent times despite its importance in
the construction industry and most economies.

3.2 Country analysis of delayed payment publications

As indicated in Table 2 and Figure 3, out of the 85 papers extracted and analysed, a
substantial number of publications were from Asia, accounting for 50.7% of the
publications. Specifically, Malaysia led with 16 papers, Sri Lanka and China followed with 5
and 4 articles, respectively. UK and Slovenia contributed 3 papers each which made Europe

Figure 2.
Delayed payment in
construction annual
distribution of
publications
CI second with 15.5% while Morocco and Nigeria with two publications each, positioning
Africa third with 8.5% of the analysed papers in the study. The residual 25.3% was
contributed by the rest of the continents.

3.3 Co-authorship network of delayed payment publications

The co-authorship analysis evaluates systematically the knowledge structure of a research
filed in an organised and cohesive manner (Al-sharafi, 2022). This study adopted VOS
Viewer to perform this analysis based on a full counting approach with the unit of analysis
as author. The chosen threshold for the minimum number of documents per author was set
at 2. Out of 220 authors, 17 of them met this threshold. Table 3 indicates the most productive
researchers regarding delayed payment to contractors. The co-authorship shows the
connection between authors whose scholarly works are cited within same documents.
The top ranked authors with delayed payment in construction-related publications were
Wu Jin, Rachandra Thanuja, Salamon Tanja and Belak Jernej who have published three

Country of authors No. of articles

Malaysia 16
Sri Lanka 5
China 4
Table 2. UK 3
Slovenia 3
Top 10 countries
Iran 2
with highest New Zealand 2
publications in Spain 2
delayed payment to Nigeria 2
contractors Morocco 2

Figure 3.
Mapping of delayed
payment to
contractors related
articles of the top 10
countries
 No. of Total link
Name of author Affiliation Country Documents citation strength

Wu, Jin Department of Civil Engineering, The University of Hong Kong China 3 141 4
Rachandra, Thanuja Department of Economics, University of Moratuwa Sri Lanka 3 129 2
Salamon Tanja University of Primorska, Faculty of Management Slovenia 3 35 4
Belak, Jernej Faculty of Business and Economies, University of Maribor Slovenia 3 12 2
Abdul-Rahman, Hamzah Faculty of Built Environment, University of Malaysia Malaysia 2 225 2
Takim, Roshana Faculty of Architecture, Planning and Surveying, Universiti Teknologi Malaysia 2 127 2
MARA
Kumaraswamy, Mohan Department of Civil Engineering, The University of Hong Kong China 2 89 3
Soo, Gary Department of Civil Engineering, The University of Hong Kong China 2 73 3
Judi, Siti Suhana Faculty of Built Environment, Universiti Teknologi Malaysia, MARA Malaysia 2 62 0
Rotimi, James Olabode School of Built Environment at Massey University New 2 47 2
Bamidele Zealand
Akinola Gbemisola Ajoke The Federal Polytechnic, Ilaro Nigeria 2 33 0
Milfelner, Borut Faculty of Business and Economies, University of Maribor Slovenia 2 12 2
Berrado, Abdelaziz School of Engineering, Mohammed V University Morocco 2 11 2
Saikouk, Tarik Universite Internationale de Rabat Morocco 2 10 2
Haron, Roziha Che International Islamic University Malaysia Malaysia 2 9 0
Perera, BAKS Department of Economics, University of Moratuwa Sri Lanka 2 6 0
Rogowski Waldemar Institute of Corporate Finance and Investment at Warsaw School of Poland 2 3 0
Economics

delayed payment to
Authors with at least
two publications on
Table 3.
delays
Contractor

contractors
payment
CI papers each. The rest as per Table 3 have two publications each. However, the author with
the most citation count is Abdul-Rahman Hamzah, Faculty of Built Environment,
University of Malaysia, with 225 citations. Wu Jin and Rachandra Thanuja follow with 141
and 129 citations, respectively.
Figure 4 indicates a visualization network which shows the collaboration between
researchers in the field of delayed payment. It suggests a limited collaboration among
researchers. There exists a collaboration between Soo Gary, Wu Jin and Kumaraswamy
Mohan. However, this is an in-country (China) one. Similarly, Milfelner Borut, Salamon
Tanja and Belak Jernej, in Slovenia also collaborate in the field. Regarding inter-country
collaboration, Rachandra Thanuja of Sri Lanka has collaborated with Rotimi James Olabode
Bamidele of School of Built Environment University of Massey, New Zealand while
Rogowski Waldemar of Institute of Corporate Finance and Investment (New Zealand) has
worked with Salamon Tanja of Slovenia.

3.4 Sources of delayed payment publications

The papers for this review were published in 62 different outlets. However, 56 of the journals
published single papers within the time frame of this research. Table 4 illustrates the top six
outlets that published delayed payment in construction-related articles or conferences
papers. Journal of Financial Management Property and Construction topped the chart with
four articles, followed by the IOP Conference Series Materials Science and Engineering that
published three papers. The rest have two publications each.

3.5 Co-occurrences (keyword) analysis

Lozano et al. (2019) argued that co-wording (keyword occurrence) illustrates the relationship
of keywords used by different scholars on a particular topic of interest to them to establish
the structure, development, application and methodology in the domain. VOS viewer was
used for author keywords and fractional counting to visualize the knowledge domain of the
publications. The occurrence of a keyword was set at a minimum of 2, generating 48
keywords meeting the threshold. Further refinement of the initial keywords was done

Figure 4.
Co-authorship
network from science
mapping
through filtering, such as the combination of” construction” and “construction industry” as Contractor
well as “delay payment” and “delay payments” while general keywords such as contractor, payment
project and delay were ignored in the analysis. delays
In the resultant visual map produced by VOS viewer, a network with 83 links and a total
link strength of 55 emerged with four (4) clusters based on the most occurring keywords,
highlighted in different node colours as shown in Figure 5. Red cluster, labelled as “causes of
delayed payment” containing 12 items; Green cluster, labelled as “delayed payment
measures” containing 11 items. Whiles the blue cluster contained nine items with the label
“effects of delayed payment”. The last cluster (yellow) with eight items which further
expanded into two sub-categories and labelled as “ethical issues of delayed payment” and
“legal and regulatory issues in delayed payment”.

4. Qualitative discussions
The scientometric analysis of the delayed payment to contractor literature led to
summarizing emerging trends in the field, identifying existing research gaps and linking
same with future research directions within the study area. The results of the analysis
produced five (5) thematic research domains from prior literature, and these include:

No of published
S/N Source Cite score 2022 articles Total citation

1 Construction Management and Economics 14.0 2 3,608

2 International Journal of Project 6.3 2 4796
Management
3 Journal of Construction Engineering and 6.0 2 1,301
Management Table 4.
4 Journal of Financial Management of 2.3 4 191
Top six journals and
Property and Construction
5 Australasian Journal of Construction 1.9 2 91 conferences with
Economics and Building delayed payment to
6 IOP Conference Series Materials Science 1.1 3 102 contractors
and Engineering publications

Figure 5.
Visual presentation of
co-occurring
keywords
CI (1) causes;
(2) effects;
(3) ethical issues;
(4) legal and regulatory issues; and
(5) Mitigation measures of delayed payment in the construction industry.

4.1 Causes of delayed payment in the construction industry

Causes of delayed payment as categorised by Akinsiku and Ajayi (2016) include client/
owner-related factors, contractor-related factors and other-related factors. This review
grouped the causes of delayed payment under client/owner-related factors, contractor-
related factors, client/owner and contractor-related factors, communication and procedural-
related factor(s) and project legal environment-related factor(s) as indicated by Table 5.
Generally, the review shows that most of the causes of delayed payment are client/owner-
related as collaborated by some scholars (for example, Ansah, 2011; Odenigbo et al., 2020).
4.1.1 Client/owner-related causes of delayed payment. Payment of work done is
dependent on the client/owner of the project. It is, therefore, expected that payment is
effected once the job has be executed according to the contract or agreement, however, the
review indicates that paymasters are the most contributors of delayed payment (Masrom
et al., 2021). Poor financial capacity tops the client/owner-related causes of delayed payment,
with 14 author references (Table 5).
Lack of strong financial background often leads to cashflow challenges which makes
clients unable to honour their financial obligations when due (Ansah, 2011). Other factors
include client’s payment practices (Asuquo and Effiong, 2017; Haron and Arazmi, 2020; Nor
et al., 2014); slow processing and delay in finalizing variations (Abdul-Rahman et al., 2009;
Ramachandra and Rotimi, 2015). Furthermore, the procedure for payment by clients is often
clogged with too many intermediaries as well as personnel with insufficient knowledge and
understanding about payment claims procedures and contract administration and, thus,
causing undue delays in payments. (Asuquo and Effiong, 2017; Haron and Arazmi, 2020).
4.1.2 Contractor-related causes of delayed payment. Mostly, contractors are quick to shift
the responsibility of delayed payment to clients/owners. However, contractors sometimes
contribute to such challenges (Ansah, 2011). These include submission of claims without
supporting documents, incomplete or error ridden claims (De Silva et al., 2008; Senarathne
et al., 2020; Wu, 2019). The time required for the correction and resubmission lengthens the
processing time thereby contributing to delayed payment.
Ishak et al. (2019) indicated that contractor compromise on the standard specification
also causes delay in payment of claims. The works of (for example, Ansah, 2011; Judi and
Mustaffa, 2016; Senarathne et al., 2020; Zakaria et al., 2012) provide evidence of such
instances causing payment delays to contractors. In addition, clients’ dissatisfaction with
poor quality of work by contractors also contributes to delayed payment (Asuquo and
Effiong, 2017; Ramachandra and Rotimi, 2015).
4.1.3 Client/owner and contractor-related causes of delayed payment. Disagreement in
variation of works by contractor and clients also cause payment delays (Abdul-Rahman
et al., 2009; Haron and Arazmi, 2020). Such instances arise as a result of lack of trust among
parties leading to conflict and misunderstanding (Masrom et al., 2021). Studies of some
scholars (for instance, Ansah, 2011; Asuquo and Effiong, 2017; Ishak et al., 2019; Judi and
Mustaffa, 2016) have highlighted this cause. Price variation disagreement (Wu, 2019;
 No. of authors
Causes of delayed payment Source Authors reference

Poor financial capacity of client/ Client/owner related Abdul-Rahman et al. (2009), Ansah (2011); Haron and Arazmi (2020), Ishak et al. 14
owner (2019); Judi and Mustaffa (2016); Kathpalia and Jhamb (2022); Munaaim et al. (2007),
Nor et al. (2014); Odeh and Battaineh (2002); Prašnikar et al. (2004); Ramachandra
et al. (2015); Senarathne et al. (2020), Wu (2019); Ye and Abdul Rahman (2010)
Delay in evaluation, valuation and Client/owner related Abdul-Rahman et al. (2009), Ansah (2011); Asuquo and Effiong (2017), Haron and 10
certification of works Arazmi (2020); Ishak et al. (2019), Judi and Mustaffa (2016); Munaaim et al. (2007),
Odeh and Battaineh (2002); Senarathne et al. (2020), Ye and Abdul Rahman (2010);
Zakaria et al. (2012)
Disagreement in valuation of works Client/owner related (Abdul-Rahman et al. (2009); Ansah, 2011); Asuquo and Effiong, 2017); Haron and 9
and contractors Arazmi, 2020); Ishak et al. (2019); Judi and Mustaffa, 2016); Ramachandra et al.
(2015); Senarathne et al. (2020), Zakaria et al. (2012)
Lack of proper record keeping Contractor related Abdul-Rahman et al. (2009), Ansah (2011); Asuquo and Effiong (2017), Nor et al. 7
(2014); Senarathne et al. (2020); Q. Wu (2019), Zakaria et al. (2012)
Deficiency in client management Client/owner related Asuquo and Effiong (2017), Haron and Arazmi (2020); Judi and Mustaffa (2016), 5
capacity Munaaim et al. (2007); Ramachandra et al. (2015)
Client dissatisfaction on poor quality Contractor related Asuquo and Effiong (2017), Ishak et al. (2019); Judi and Mustaffa (2016); 5
of work Ramachandra et al. (2015); Zakaria et al. (2012)
Standard specification variation Contractor related Ansah (2011), Judi and Mustaffa (2016); Odenigbo et al. (2020), Senarathne et al. 5
(2020); Zakaria et al. (2012)
Bureaucracy in payment process/ Client/owner related Abdul-Rahman et al. (2009), Asuquo and Effiong (2017); Judi and Mustaffa (2016); 4
administration Ramachandra et al. (2015)
Payment practices/culture Client/owner related Ansah (2011), Asuquo and Effiong (2017); Haron and Arazmi (2020), Nor et al. 4
(2014)
Lack of communication flow and Communication and Akinsiku and Ajayi (2016), Ansah (2011); Masrom et al. (2021); Ramachandra et al. 4
coordination in contract procedural related (2015)
implementation
Contractual content deficiency and Project legal Ansah (2011), Masrom et al. (2021); Mathusha et al. (2016), Ogunde et al. (2017) 4
implementation challenges environment related
Price variation disagreement Client/owner related Ramachandra et al. (2015); Wu (2019), Zakaria et al. (2012) 3
and contractors
Unethical practices Client/owner related Ramachandra et al. (2015); Wu (2019), Zakaria et al. (2012) 3

payment
Table 5.
delays

Causes of delayed
Contractor
payment
CI Zakaria et al., 2012), delay in finalisation of accounts and rectification of defects (Yunianto
and Rarasati, 2021) also contribute to delayed payment.
4.1.4 Communication and procedural-related causes of delayed payment. Inadequate
information flow (Ansah, 2011) between project team members generate unhealthy and
unnecessary disagreements that delay payments. Inadequate coordination in contract
implementation (Masrom et al., 2021; Akinsiku and Ajayi, 2016; Ramachandra and Rotimi,
2015) results in payment delays. Such situations arise when common data environments,
enabled by technology, are not deployed in the project communication management process.
4.1.5 Project legal environment-related causes of delayed payment. Deficiency in the
knowledge of the legal environment of construction projects by project participants often
underpins delayed payment to contractors. Furthermore, insufficient contract provisions
lead to indecision among project participants and create contract administration challenges.
Such situations result in misunderstandings among project parties and subsequently
delayed payment (Masrom et al., 2021; Mathusha et al., 2016). In addition, a contractual
clause such as “pay-when paid” causes delayed payments along the construction supply
chain (Odenigbo et al., 2020). Even though in some countries like UK, the Housing Grants,
Construction and Regeneration Act 2011 as amended has made such clauses in contracts,
unenforceable, the practice still exists in the industry.

4.2 Effects of delayed payment in the construction industry

The literature revealed a number of delayed payment effects such as financial losses; profit
reduction (Andalib et al., 2018; Hazizi et al., 2020; Paul et al., 2012)’ negative relationship
between stakeholders (Akinsiku and Ajayi, 2016); and project abandonment (Ansah, 2011;
Sambasivan and Soon, 2007). This study, however, categorized the effects into two broad
themes as financial and non-financial themes (Table 6).
4.2.1 Financial effects of delayed payment in the construction industry. The most
significant effect of delayed payment in the construction industry is cashflow problems
(Huang et al., 2022) with dire consequences on overall project progress. The cashflow of
contractors of a project is the cash inflow and outflow of a specific project. Once the outflow
exceeds expected inflows from clients, (negative net cashflow) operational progress of the
project often gets compromised (Hazizi et al., 2020).
Unexpected increase in cost directly affects the profit of contractors (Checherita-
Westphal et al., 2016; Hazizi et al., 2020; Huang et al., 2022; Paul et al., 2012), and sometime
produces financial losses (Andalib et al., 2018; Ansah, 2011; Hazizi et al., 2020; Paul et al.,
2012). Some scholars (for example, Huang et al., 2022 and Paul et al., 2012) argue that the
financial and economic growth of the country are adversely affected when the construction
industry faces the challenges of profit reduction and financial losses.
4.2.2 Non-financial effects of delayed payment in the construction industry. Non-financial
effects consist of project abandonment (Ansah, 2011; Sambasivan and Soon, 2007);
adversarial relationships among supply chain partners (Akinsiku and Ajayi, 2016; Ansah,
2011; Hazizi et al., 2020; Kikwasi, 2021); time overrun and project progress delay (Andalib
et al., 2018; Ansah, 2011); and inequality, unfairness, injustice and lack of trust among
partners along construction supply chains (Munaaim et al., 2007).

4.3 Measures of mitigating delayed payment problems

The extant literature indicates several measures adopted by the construction industry to
address the phenomenon of delayed payment. Firstly, enactment of laws to alter delayed
payment narratives (Samaraweera et al., 2019) and to safeguard the construction industry.
Wu et al. (2008) indicates that the Chinese government’s decision to formulate appropriate
Effects of delayed payment Classification Authors
Contractor
payment
Financial losses Financial effects Andalib et al. (2018); Ansah, 2011); Hazizi delays
et al. (2020), Paul et al. (2012)
Profit reduction Financial effects Checherita-Westphal et al. (2016), Hazizi
et al. (2020); Huang et al. (2022), Paul et al.
(2012)
Cashflow problems Financial effects Akinsiku and Ajayi (2016), Hazizi et al.
(2020); Huang et al. (2022), Munaaim et al.
(2007)
Bankruptcy Financial effects Checherita-Westphal et al. (2016), Hazizi
et al. (2020)
Project abandonment Non-financial effects Akinsiku and Ajayi (2016), Ansah (2011);
Hazizi et al. (2020), Sambasivan and Soon
(2007)
Negative relationship among Non-financial effects Akinsiku and Ajayi (2016), Ansah (2011);
project parties Hazizi et al. (2020), Kikwasi (2021);
Sambasivan and Soon (2007)
Time overrun and project Non-financial effects Akinsiku and Ajayi (2016), Ansah (2011);
progress delay Kikwasi (2021), Munaaim et al. (2007);
Sambasivan and Soon (2007), Sanni-
Anibire et al. (2020)
Reduction in economic and Financial effects Huang et al. (2022), Paul et al. (2012)
financial growth and Table 6.
performance Effects of delayed
Inequality, unfairness, injustice Non-financial effects Peng and Lu (2021) payment in the
and lack of trust construction industry

legal Acts as a long-term strategy to address the challenges of delayed payment became
eminent when the administrative interventions failed. To reinforce this position, Mohamad
et al. (2018) suggested that much emphasis should be placed on the implementation of the
laws, as mere enactment is unable to realise the desired objectives.
Secondly, preventive actions (Mohamad et al., 2018); this includes investigating the
financial strength and cashflow status of clients or owners (Samaraweera et al., 2019; Ye and
Abdul Rahman, 2010) before bidding for projects to guide selection of paymasters (Abdul-
Rahman et al., 2011).
Thirdly, scholars (for example, Ye and Abdul Rahman, 2010; Abdul-Rahman et al., 2011)
have emphasised education and training of project parties on the precarious effects of
delayed payment on stakeholders; cashflow management training; and risk management of
delayed payment (Abdul-Rahman et al., 2011). Such technical knowledge and skills will
engender the right attitudes among project parties in respect of payment discipline and
empower them to be more conscious about the management of the phenomenon (Swai and
Arewa, 2018).
Four, measures such as submission of accurate and timely invoices with required
documentations; payment of interest on delayed amounts; defining a proper time frame for
payment in contract agreement (Perera and Dewagoda, 2020); introduction of contractual
provisions in contract agreements such as slow down and suspension of work, dispute
resolution and backlisting of firms (Mathusha et al., 2016); inclusion of promissory note or
payment bonds in agreement (Samaraweera et al., 2019); and negotiation of payment terms
with clients (Ye and Abdul Rahman, 2010) can minimise the challenge of delayed payment
in the construction industry.
CI 4.4 Ethical issues of delayed payment
Salamon et al. (2017) indicate that delayed payment is an unethical behaviour as
organisations are not oblivious of their payment responsibilities. Payment indiscipline
results from excessive emphasis on the achievement of corporate goals by organisations. In
the process, untoward behaviours are justified and counter norms developed (Salamon et al.,
2017). Jansen and Von Glinow (1985) refer to counter norms as generally unacceptable social
conducts considered as a justifiable course of action. Delayed payment is considered as one
of the business counter norms (Jansen and Von Glinow, 1985).
The empirical evidence indicates that the ethical behaviour of an organisation is largely
dependent on the entity’s policies, norms and practices which are mostly influenced by
management (Šalamon et al., 2015). Therefore, senior executives may choose to put a
premium on ethics and shared values rather than profit maximization obsession to enhance
payment discipline.

4.5 Legal and regulatory issues of delayed payment

Several countries in response to the debilitating effect of delayed payment on contractors
and other construction supply chain partners have created statutory and regulatory regimes
to address the phenomenon, facilitate payment and speed up resolution of subsequential
disputes (Mohd and Ismail, 2014).
A major example is the European Union (EU) Directive 2000/35/EC of June, 2000 on
fighting late payment in commercial transactions which failure led to the adoption of
Directive 2011/7/EC among all member states (Conti et al., 2021; European Union, 2020).
Even with the current Directive, industry players are calling for enforceable and efficient
regulation because of rights enforceability refusal by creditors in the interest of business
relationships. However, Intrum (2018) indicated that after five years of implementing the
new directive, only 28% of companies knew about the existence of the regulation whiles a
fairly moderate 19% reported of a positive impact.
The works of Karib and Nor (2008), Sahab and Ismail (2011) and Ramachandra (2013) as
reported by Mohd and Ismail (2014) indicate country-specific Acts and legislations and their
functions (Table 7). In Mainland China, Wu et al. (2008) indicate that the country has made
several attempts at the Construction Law of the Peoples Republic of China 1997 primary to
ensure construction safety with some clauses dealing with funding of projects. Other Chinese
laws aimed at eradicating payment difficulties in the construction industry includes the Tender
and Bidding Law 1999, the Contract Law promulgated in 1999, which consolidated all existing
legislations to govern all types of contracts and their contractual relationships (Wu et al., 2008).
Again, Malaysia also enacted the Construction Industry Payment and Adjudication Act to
provide guidance and protect the right of parties in construction against delayed and late
payment (Sr et al., 2006).

5. Future directions
The systematic review has summarised the existing literature on delayed payment in
construction and subsequently highlighted several areas that can be explored for future
research in the field (Figure 6). Firstly, the existing knowledge on the causes of delayed
payment in the construction industry has focused on the causal agents of the phenomenon.
Specifically, which project party individually or jointly as well as project-related attribute
causes the delay. What is still not clear is how specifically consultants (i.e. designers and
project management firms) cause delays in payment. In developed countries, often designers
and project managers’ roles are distinct. However, in most developing countries where there
are institutional voids (Asiedu and Adaku, 2020), designers automatically take on the roles
S/N Acts and Legislations Functions
Contractor
payment
1 Construction Contracts Act 2004 (Western Ensure that money flows in the contractual delays
Australia, Australia) repealed by Building chain by ensuring timely payment
and Construction Industry (Security of
Payment) Act 2021 (WA)
2 Building and Construction Industry of Protect, ensure and facilitate entitlements
Payment Act 2004 (Queensland, Australia) and payment of progress and other
repealed by Building Industry Fairness payments
(Security of Payment) Act 2017
3 The Construction Contracts Act 2002 (New Facilitate regular and timely payment,
Zealand) as amended by Construction speedy dispute resolution, provide remedies
Contracts Amendment Act 2015 for non-payment
4 Construction Contracts (Security of Protect contractor’s right, facilitate timely
Payment) Act 2004 (Northern Territory, payment, speedy dispute resolution,
Australia) as amended by Northern provide remedies for non-payment
Territory Construction Contracts (Security
of Payment) 2020
5 Building and Construction Industry Expediting payment and improving
Security of Payment Act 2004 (Singapore) cashflow
as amended in 2018
6 Tasmanian Security of Payment Act 2009 Reform payment behavior in the industry
7 Housing Grants, Construction and To improve payment practices
Regeneration Act 1996 (UK, England) as
Table 7.
amended in 2011 Payment-related acts
and legislations and
Source: Adapted from Mohd and Ismail (2014) functions of countries

of project managers in project delivery. Future studies should, therefore, investigate

contributions of designers and project managers to delayed payments, individually and
jointly. In addition, comparative studies of causes of delayed payments would be required to
clearly ascertain the similarities and dissimilarities regarding the causes of delayed
payment in both developing and developed countries. How project size and complexity
influence delayed payment would be worth exploring in future studies.
Secondly, the extant literature on delayed payment effects have focused on financial and
non-financial effects on project stakeholders. However, the specific effects of delayed
payments socially and environmentally are still not clear in the literature. Hence, future
research can explore the stress, depression and anxiety-related effects on construction supply
chain personal health as a result of delayed payments. When payments are delayed, projects
overrun their time and sometimes get abandoned. The environmental effects of such
situations are often ignored and are worth exploring by future studies, particularly in
developing countries. Furthermore, delayed payments lead to significant financial challenges
among partners along the construction supply chain. How they cope and what specific
coping mechanisms are deployed by the partners are still not known in the extant literature.
Are the coping mechanisms similar or dissimilar at the upstream and downstream of the
supply chain? Investigations along these lines would be worth the efforts of future studies.
Thirdly, literature has focused primarily on administrative and preventive measures in
combating the phenomenon of delayed payments. To augment the efforts, future studies
should consider exploring the development of a client payment capability index. Such an
index will offer vital information on the ability of project clients to honour payments and
also acts a decision support system for contractors intending to do business with potential
CI Delayed Payment Themes Existing Studies Future Directions
Client/Owner-related causes Consultant-related causes
Delayed payment Contractor-related causes Comparative studies of causes
causes Client & contractor-related causes of delayed payments focusing
on developing and developed
Communication & procedural- countries
related causes
Project size and complexity and
Project legal and regulatory delayed payments
environment-related causes

Social and environmental

Delayed payment impact of delayed payments
Financial effects
cffects Coping mechanisms by
Non-financial effects contractors to delayed
payments and their
effectiveness

Client payment capability index

Delayed Payment Administrative intervention Collaborative project
mitigation measures procurement models
Preventive actions
Common data environment
tools in managing projects

Organisational ethical index

Geographical ethical
Ethical Issues of Practices comparative studies (e.g.,
delayed payment developed and developing
Ethical policies
countries)

Figure 6. Levers and inhibitors of legal

Framework of status and regulatory compliance
quo of delayed regarding delayed payments
Legal & Regulatory
payment in Enactment of laws
Issues of delayed Comparative studies of levers
construction and
payment Implementation and inhibitors of compliance
future directions

clients. Furthermore, diverse project partners have varied interests and motivations.
Collaborative procurement models that seek to recognize the diverse interests and align
them in order to minimise the prevalence of delayed payments in the industry will be a step
in the right direction. Hence, alliancing models which embed collaborative principles can be
explored by further studies, particularly how they address the problem of delayed payment.
In addition, the use of technology in project delivery can potentially contribute to addressing
the challenge of delayed payment. For example, how common data environment tools and
platforms support collaboration among project participants and eventual minimization of
delayed payments should be an area future research can focus on.
 Fourthly, ethical issues as a subject of delayed payment has been recognised because of Contractor
its potential to minimize the occurrence of delayed payment in the construction industry payment
(Šalamon et al., 2015). Studies (for example, Šalamon et al., 2015) indicate the influence of
organisational ethical values on delayed payments. In this regard, developing an
delays
organisational ethical index to ascertain the level of organisations’ ethics will not only serve
as a motivation for firms to improve on their ethical values but will also offer useful pointers
to vendors intending to do business with potential clients having regard to delayed
payments. Future studies can explore this. Furthermore, comparative studies on firms’
ethical values and delayed payment occurrence in both developing and developed countries
can be investigated by future studies.
Fifthly, establishing the link between delayed payment and legal and regulatory environments
of projects can be explored further. For instance, in still not clear in the extant literature what the
levers and inhibitors are regarding compliance with legislations and regulations in respect of
delayed payments. Future studies can explore this with an extension of scope to cover the
similarities and dissimilarities from the perspectives of both developing and developed countries.

6. Conclusion
The study provided a systematic review of published literature related to delayed payment
in the industry to highlight the current trends in the field, through a scientometric analysis.
The review was based on 85 articles and conference papers published over the last 20 years
from 2002 to 2022 and identified from Scopus and Dimensions databases. Classification and
analysis of the articles were thematised into causes, effects, mitigation measures, ethical,
law and regulatory issues as they relate to delayed payment in the construction industry.
Furthermore, following the scientometric and qualitative analysis, the study identified a
number of useful areas requiring further investigations. These include but not limited to:
 consultants-related causes of delayed payments;
 social and environmental impacts of delayed payments;
 coping mechanisms by contractors to delayed payments and their effectiveness;
 the development of client payment capability index;
 exploration of collaborative project procurement models such as alliancing to
minimise delayed payments in the industry; and
 levers and inhibitors of legal and regulatory compliance regarding delayed payments.

There are possible limitations of the study exist. The review considered only English-based
academic materials and focused on the construction industry. However, the findings and insights
provided by this study can benefit other economic sectors or industries such as automotive, IT,
health care, mining, among others. In addition, policy makers can benefit from this study by
being pointed to areas that may require policy directions to address the problem of delayed
payment. An array of potential research strands has been provided by this study for the benefit
of scholars intending to extent the frontiers of delayed payment research.

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Further reading
Akinola, G.A. and Awolesi, J.A.B. (2019), “Effects of delay in interim payment on contractor’s working
capital in Lagos state, Nigeria”, Journal of Environmental Research and Development, Vol. 3
No. 1, pp. 102-112, available at: www.bertelsmann-stiftung.de/fileadmin/files/BSt/Publikationen/
GrauePublikationen/MT_Globalization_Report_2018.pdf%0Awww.eprints.lse.ac.uk/43447/1/India_
globalisation%2C_society_and_inequalities%28lsero%29.pdf%0Awww.quora.com/What-is-the
Cao, Y., Kamaruzzaman, S.N. and Aziz, N.M. (2022), “Green building construction: a systematic review
of BIM utilization”, Buildings, Vol. 12 No. 8, doi: 10.3390/buildings12081205.
Hicham, M. and Eddine, S. (2019), “Supply chain delay in payment: review, classification and future
research directions”, Proceedings of the International Conference on Industrial Engineering and
Operations Management Pilsen, pp. 386-397.
Hou, W., Liu, X. and Chen, D. (2016), “Payment problems, cash flow and profitability of construction
project: a system dynamics model”, International Journal of Economics and Management
Engineering, Vol. 5 No. 10, pp. 1266-1272.
Maque, I. and San-Jose, L. (2017), “Understanding and solving late payment: the role of organizational Contractor
routines”, Management International, Vol. 22 No. 1, pp. 146-156,162,164,166, available at: www.
proquest.com/scholarly-journals/understanding-solving-late-payment-role/docview/2085776360/se-2? payment
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ofi/enc:UTF-8&rfr_id=info:sid/ProQ%3Aabiglobal&rft_val_fm
Mohamed, R., Ghazali, M. and Samsudin, M.A. (2020), “A systematic review on mathematical language
learning using PRISMA in Scopus database”, Eurasia Journal of Mathematics, Science and
Technology Education, Vol. 16 No. 8, pp. 1-12, doi: 10.29333/ejmste/8300.
Saad, A., Ajayi, S.O. and Alaka, H.A. (2022), “Trends in BIM-based plugins development for
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Salamon, T., Milfelner, B. and Belak, J. (2016), “Late payments explained by ethical culture”, Journal of
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Corresponding author
Ebenezer Adaku can be contacted at: [email protected]

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