A council or NHS contract pays on a 90-day cycle I can't negotiate

Why this cycle bites even when the contract is sound

Public-sector procurement runs on standardised terms set by the council or NHS body's finance function, not by the individual contract manager you deal with day to day. A 90-day cycle is usually policy, applied the same way to every supplier on the framework, which is why asking for faster payment on this one contract rarely gets anywhere.

The bite comes from timing mismatch rather than the contract being unprofitable. You are paying staff, materials and subcontractors on your normal cycle while the client side settles invoices on theirs, so the gap between cost and payment is structural and repeats every cycle, not a one-off shock.

Because the cycle is fixed, the problem isn't solved by chasing harder. It's solved by planning around a known, recurring pattern — which is a different and more manageable task than negotiating with a private client who might flex.

The practical options, and finance is one of several

Some directors resequence their own supplier and payroll terms to better match the cycle — paying subcontractors slightly later, or renegotiating material accounts, so the company's own outgoings shift closer to when the public-sector invoice actually clears.

Others build a cash buffer specifically sized to the contract, holding enough working capital to carry one full cycle without strain, then replenishing it as invoices are paid. This suits businesses with steady, predictable public-sector volume where the size of the gap is well understood.

Where the gap is too large for a buffer alone, or the contract is large relative to the rest of the business, a working-capital facility or invoice-based finance can bridge the specific 90-day wait, releasing funds against the invoice once it's raised rather than waiting for the client's cycle to complete. This is worth considering alongside the other options, not instead of them — many directors combine a smaller buffer with occasional finance for larger invoices.

Pricing and structuring around a cycle you can't change

Because the payment cycle is fixed and known before you sign, it can be priced in rather than treated as a surprise. Some directors quote public-sector work with the financing cost of the wait already factored into the rate, so the 90-day gap doesn't erode margin every time.

Contract structure also matters within what the procurement rules allow — staged milestones, earlier invoicing points, or splitting a large invoice into parts that qualify for payment sooner can shorten the effective wait even when the headline cycle itself is untouchable.

Keeping a clean, error-free invoicing process matters more than it might for a flexible private client, since queries or rejected invoices on a rigid cycle often mean waiting for the next cycle entirely rather than a short delay.

What it means for you

A fixed 90-day public-sector cycle is a planning problem, not a negotiation problem — the schedule won't move for one supplier, so the practical work is matching your own outgoings, buffers and pricing to it.

Look first at what you control: supplier terms, invoicing accuracy, and how the contract is priced. Bring in a working-capital facility where the gap is genuinely too large to buffer, sized to the specific cycle rather than as a general overdraft.

Credicorp is a business lender, not a consumer or personal-credit provider, and works with UK limited companies and LLPs. As an exempt commercial lender it sits outside FCA consumer-credit rules, and any facility is assessed on the business and the contract, not promised in advance.