Late Payments, Invoice Fraud — And What Your Payment Process Has To Do With It

April 1, 2026

The UK Government has announced the most significant crackdown on late payments in over 25 years. At the same time, enforcement agencies have launched a targeted campaign against invoice fraud in construction.

Taken together, these are not isolated developments. They are signals of a deeper shift in how payment practices are being scrutinised — legally, financially, and operationally — across the industry.

Most commentary on late payments focuses on cashflow. Most discussion of fraud focuses on cyber risk. But both issues share a common, often overlooked foundation: the structure of the payment process itself.

Late payment does not happen in a vacuum. It is enabled by ambiguity — unclear notices, disputed valuations, delayed certifications, and fragmented communication across supply chains. The Government’s new measures — including mandatory interest on late payments, stricter enforcement, and defined timelines for dispute — are designed to remove that ambiguity (GOV.UK).

But legislation can only go so far. If the underlying process remains inconsistent, opaque, or dependent on email and spreadsheets, delay will persist — simply in more complex forms.

Invoice fraud follows a similar pattern. It does not succeed because systems are hacked at random. It succeeds because payment instructions are often unstructured, unverified, and communicated across insecure channels. A single intercepted email, a changed bank detail, or a missed verification step can redirect hundreds of thousands of pounds (Construction Enquirer).

Construction is particularly exposed. Large payment values, multi-tier supply chains, and decentralised communication create ideal conditions for both delay and fraud.

For mid-tier contractors, this presents a practical challenge. The regulatory environment is tightening. Expectations around payment discipline are increasing. At the same time, financial risk is rising.

A payment process that relies on inboxes, attachments, and manual tracking cannot reliably meet these demands. It cannot enforce timelines. It cannot guarantee verification. And it cannot produce a clear, defensible record of what happened, when, and why.

A structured digital payment workflow changes this fundamentally.

Every application is standardised. Every notice is issued within defined rules. Every approval is recorded, time-stamped, and attributable. Payment instructions follow controlled pathways, not informal communication. The result is not just efficiency — it is clarity.

Clarity reduces delay. It also reduces opportunity for fraud.

It is also becoming increasingly important from a compliance perspective. Regulators are no longer focused solely on outcomes, but on process. The ability to demonstrate how payments are managed — consistently, transparently, and securely — is becoming a differentiator.

The CAPS approach

CAPS creates a structured, auditable record of every payment event: every application, every notice, every valuation, every payment instruction. Workflows are controlled, timelines are enforced, and all actions are attributable to named users.

This reduces the conditions in which late payment occurs and materially lowers exposure to invoice fraud. It also provides a clear, exportable record that supports compliance with evolving regulatory expectations.

→ Find out how CAPS strengthens your payment process. Request a demo.