DEVELOPER PAYMENT DELAYS IMPACT CONTRACTOR CASH FLOW AND PROJECT SCHEDULE
DOI:
https://doi.org/10.54314/jssr.v9i4.7099Keywords:
Contractor Cash Flow, Developer Payment Delays, Housing ProjectsAbstract
Developer payment delays represent a major financial bottleneck in Padang City’s residential housing sector. This study investigates the impact of developer progress payment arrears (termin) on contractor cash flow stability and project schedule performance. Utilizing a quantitative explanatory design, empirical data was gathered through structured questionnaires distributed to 100 key respondents, including project managers, site engineers, company directors, and finance managers across housing contractors in Padang. The data was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 4. The empirical results reveal that developer payment delays have a significant negative impact on contractor cash flow (β= -0.684, p < 0.001). In turn, contractor cash flow exerts a strong positive effect on project schedule performance (β= 0.482, p < 0.001). Payment delays also directly impair schedule performance (β= -0.285, p = 0.002). Furthermore, mediation analysis confirms that contractor cash flow acts as a significant partial mediator (β= -0.330, p < 0.001). Collectively, the framework explains 54.2% of the variance in project schedule performance (R2 = 0.542). This study concludes that financial delays by developers erode contractor liquidity, triggering operational disruptions on site. Developers are urged to enforce strict disbursement schedules to prevent project completion overruns.
Downloads
References
Adaku, E., Osei-Poku, V., Ottou, J. A., & Yirenkyi-Fianko, A. (2024). Contractor payment delays: A systematic review of current trends and future directions. Construction Innovation, 24(5), 1205–1227. https://doi.org/10.1108/CI-12-2022-0317
Alfons, A., Nüfer Yasin Ateş, & Groenen, P. J. F. (2021). Supplemental Material, sj-pdf-1-orm-10.1177_1094428121999096—A Robust Bootstrap Test for Mediation Analysis. 1291248 Bytes. https://doi.org/10.25384/SAGE.14406794
Ashi Raman & Mr. Mohit Kumar Tiwari. (2025). Construction Scheduling and Project Management. International Journal of Advanced Research in Science, Communication and Technology, 416–424. https://doi.org/10.48175/IJARSCT-26355
Chadee, A., Ali, H., Gallage, S., & Rathnayake, U. (2023). Modelling the Implications of Delayed Payments on Contractors’ Cashflows on Infrastructure Projects. Civil Engineering Journal, 9(1), 52–71. https://doi.org/10.28991/CEJ-2023-09-01-05
Chanchal Mukherjee, P. Venkata Rao, & P. Venkata Rao. (2024). An Empirical Study of Cash Management Practices with reference to Construction Sector in Visakhapatnam District of Andhra Pradesh, India. International Research Journal on Advanced Engineering and Management (IRJAEM), 2(04), 1053–1064. https://doi.org/10.47392/IRJAEM.2024.0140
Delvianca, G., Antoro, E. D., & Belladona, M. (2025). Pengukuran Kinerja Konsultan Manajemen Konstruksi Pada Tahap Implementasi Proyek Konstruksi Pasar Purwodadi Argamakmur Kabupaten Bengkulu Utara. RIGGS: Journal of Artificial Intelligence and Digital Business, 4(4), 5215–5226. https://doi.org/10.31004/riggs.v4i4.3971
Didar, E., Bazargan, A., & Bagherpour, M. (2026). Cash flow risk management across multiple construction projects using value at risk. Engineering, Construction and Architectural Management, 33(8), 6750–6775. https://doi.org/10.1108/ECAM-07-2024-0975
Gamage, A. N. K. K. (2025). Artificial Intelligence and FinTech Applications for Reducing Payment Disputes in the Construction Industry: A Review of Secondary Evidence. Journal of FinTech and Sustainable Finance, 1, 139–150. https://doi.org/10.31875/2755-8398.2025.01.11
Hair, J., & Alamer, A. (2022). Partial Least Squares Structural Equation Modeling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3), 100027. https://doi.org/10.1016/j.rmal.2022.100027
Huda, F., & Sundari, S. (2025). Analisis Keterlambatan Pembayaran Kepada Vendor PT. X di Surabaya. Jurnal Riset Manajemen Dan Akuntansi, 5(3), 712–725. https://doi.org/10.55606/jurima.v5i3.5878
Johnson, H. (2025). Building Resilient Supply Chains in the Face of Global Uncertainty: Insights from Small and Medium-Sized Enterprises (SMEs). Business, Economics and Management. https://doi.org/10.20944/preprints202501.2369.v1
Kamarudin, N. Y., Kosnin, A. M., Handayani, L., & Mamat, C. R. (2024). Structural equation modelling: Validation of career readiness model using psychological constructs. International Journal of Evaluation and Research in Education (IJERE), 13(1), 159. https://doi.org/10.11591/ijere.v13i1.2
Karnsomdee, P. (2021). Questionnaires-Sanook-Scopus (p. 313641 Bytes) [Dataset]. figshare. https://doi.org/10.6084/M9.FIGSHARE.14993541
Nie, L., Oldenburg, B., Cao, Y., & Ren, W. (2024). Additional file 4 of Continuous usage intention of mobile health services: Model construction and validation. 20807 Bytes. https://doi.org/10.6084/M9.FIGSHARE.26587131
Prince Asiamah Mintah. (2025). Debt-Free Property Development as a Model for Financial Sustainability. https://doi.org/10.5281/ZENODO.17574500
Russo, D., & Stol, K.-J. (2022). PLS-SEM for Software Engineering Research: An Introduction and Survey. ACM Computing Surveys, 54(4), 1–38. https://doi.org/10.1145/3447580
Santana Rivas, L. D., & Alzate Navarro, A. (2023). La promoción-construcción capitalista en la región metropolitana de Medellín: ¿hacia un único mercado de la vivienda? Cuadernos de Geografía: Revista Colombiana de Geografía, 32(2), 306–327. https://doi.org/10.15446/rcdg.v32n2.97748
Soliman, M., Dorra, E., & Hosny, O. (2024). The Integration of Supply Chain Finance in the Construction Industry and Its Influence on the Contractor’s Cash Flow. Construction Research Congress 2024, 283–291. https://doi.org/10.1061/9780784485286.029
Thabani Nyoni. (2018). AN EMPIRICAL ASSESSMENT OF CAUSES & EFFECTS OF DELAY IN RESIDENTIAL CONSTRUCTION PROJECTS IN HARARE, ZIMBABWE. https://doi.org/10.5281/ZENODO.10777108
Trail, G. T., Kim, Y. K., & Alfaro-Barrantes, P. (2024). A Critical Assessment for Sport Management Research: Comparing PLS-SEM and CB-SEM Techniques for Moderation Analysis Using Formative Measures. Journal of Global Sport Management, 9(1), 248–268. https://doi.org/10.1080/24704067.2022.2098802
Voigt, A., Khalaf, M., & Mattar, S. G. (2023). Impact of Cash Shortages on Project Performance. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 15(4), 03723003. https://doi.org/10.1061/JLADAH.LADR-898
Xie, H., Zheng, J., Zhang, Y., & Li, H. (2019). Effects of Payment Delays at Two Links in Payment Chains on the Progress of Construction Projects: System Dynamic Modeling and Simulation. Sustainability, 11(15), 4115. https://doi.org/10.3390/su11154115
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Gunawan Azwar , Indra Farni, Zuherna Mizwar (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
