Your labour-hire workers need paying. The client still hasn’t approved their timesheets
Updated: 1 day ago
Unapproved client timesheets can delay your invoice and cash receipt, but they do not remove the labour-hire employer’s obligation to pay wages owed on time.
Your workers need paying this week. They have completed their shifts, your payroll team has the hours and the client’s supervisor has not approved the timesheets. The supervisor may be away, the portal may be wrong or an overtime entry may need checking.
For an Australian labour-hire owner, each explanation creates a different collection task. The common problem is that payroll keeps moving while the invoice process stands still.
The short answer
Establish the wage amounts legally due using accurate employment records.
Separate missing client approval from a genuine dispute about hours or rates.
Escalate approval and invoicing with named people and clear deadlines.
Fund the complete delay through to customer payment, rather than approval alone.
Your workers need paying even when the client process stalls
If your business employs the workers, customer administration does not determine whether earned wages are payable. The Fair Work Ombudsman explains payment obligations for time worked. Check the applicable award, agreement and employment arrangements, including when payment must occur.
Do not tell workers their pay will simply wait for a client signature. If a payroll entry is uncertain, investigate promptly using the available records and get specialist employment advice where necessary. A client’s commercial disagreement and an employee’s wage entitlement require separate consideration.
There are two amounts to establish. One is what your employees are owed. The other is what the customer owes your business under the supply contract. They may be calculated differently because the charge rate includes more than the employee’s hourly wage.
Keep tax, superannuation and other employer costs in the wider cash schedule too. Solving the transfer of net wages while ignoring the associated obligations can leave a second shortage behind it.
Find out what “not approved” actually means
A timesheet can be waiting for a routine click, missing supporting detail or under active dispute. Put each affected week and worker into the right category rather than sending one generic reminder for the whole account.
For an administrative delay, ask who has approval authority and whether an authorised substitute can act. For a missing detail, establish exactly what document or correction is needed. For disputed hours, ask which shifts, breaks or overtime entries the client contests and why.
Use rosters, worker submissions, attendance evidence and relevant communications to investigate. The Fair Work record-keeping guidance says time and wage records must be retained for seven years and must not be false or misleading. Do not alter recorded hours to make a commercial dispute disappear.
Where only part of a timesheet is disputed, ask whether the undisputed portion can be approved and invoiced under the contract. Keep the remaining issue visible. Approval of one portion should not accidentally be recorded as settlement of everything outstanding.
Trace the cash all the way to the payment run
Approval is a milestone, rather than money in the account.
Check what happens next. Does the client require your invoice, issue a recipient-created invoice under an established arrangement or move approved hours into another review? Who checks the charge rate and purchase order? When does the contractual payment period begin?
A supervisor might approve the hours on Tuesday while accounts payable still cannot process an invoice until Friday. If the business has already missed the customer’s payment run, the delay can be longer than the approval backlog suggests.
The government explanation of payment terms makes clear why the agreed payment rules matter. Read your actual contract rather than applying the date your team normally expects.
Record the oldest unapproved hours, the oldest uninvoiced approved work and overdue invoices separately. Each needs a different action. The broader guide to improving business cash flow helps connect administrative fixes with cash collection.
An illustrative delay across two payrolls
Suppose a labour-hire business must pay $40,000 in wages on Friday. It expected a $55,000 customer receipt to replenish the payroll account, but delayed approval has pushed that receipt back. The figures here illustrate the mechanics and exclude other obligations for simplicity.
After reconciling available cash, the owner finds a $15,000 immediate shortage. It is tempting to describe the funding need as $15,000 for a few days. The next step is to test whether the delayed receipt clears before the following payroll and what other customer payments are expected.
If another $40,000 payroll arrives first, the peak shortage could be much larger. If other receipts arrive in time, it could be smaller. A week-by-week forecast needs those amounts and dates to answer the question.
Use a 13-week cash flow forecast, with a daily view around tight paydays. Include a later-payment case so the plan survives more than the supervisor’s latest estimated approval time.
What can you change before borrowing?
Assign one person to pursue approval and another to maintain payroll accuracy. Give both access to the same exception list so workers are not repeatedly asked for information already supplied.
For existing work, escalate through the client contacts named in the contract. Ask for the exact action, responsible person and expected completion time. Follow up a phone conversation with a concise written record. Keep the tone focused on resolving the process and paying for delivered work.
For future placements, agree a workable submission deadline, authorised approvers, backup contacts and a dispute escalation process. Discuss whether the contract can provide for regular payment of undisputed amounts. Have proposed clauses reviewed rather than assuming silence automatically creates approval.
Review spare cash, discretionary expenditure and any properly documented owner contribution. Check existing facility headroom if available. Changes to future rosters or placements need to respect employment commitments, contracts and operational safety. Stopping work without advice may create another problem.
Could invoice finance cover the gap?
Invoice finance may help where eligible receivables exist and the terms fit the business. It should not be assumed to fund every hour that has been worked. Before client approval, there may be no qualifying invoice or accepted debt for the proposed facility.
Ask which evidence is required, whether disputes exclude an invoice and how customer concentration affects availability. The invoice finance guide explains the distinction between money owed on paper and funds that can actually be advanced.
Compare alternatives using the period that must be funded. The guide to different working capital structures can help frame the discussion, while the guide to finance application information explains why a provider may need more than the timesheet file.
Ask for the amount actually available, total charges, repayment or collection arrangements, guarantees and the position if the client pays late or disputes the invoice. New finance cannot be relied on until approved, established and accessible. Your payroll deadline may arrive sooner.
Fix the client relationship before the backlog grows
Review approval performance by customer and site. One large account can produce attractive revenue while absorbing an outsized share of your payroll reserve. Measure the days from work to approval, approval to invoice and invoice to cleared payment.
Then consider whether the charge rate covers the administration and funding burden. Faster approval might improve the relationship for both parties. Persistent disputes may require a change to processes, terms or future exposure, subject to your obligations.
If payroll repeatedly depends on a new advance, get your accountant involved. ASIC’s guidance for directors in financial difficulty recommends early professional advice. Repeatedly financing an unresolved loss or collection problem can increase the amount at risk.
A checklist for the next payroll review
Confirm wages due and maintain accurate records.
Separate administrative delays from disputed entries.
Name the approver and escalation contact for each exception.
Confirm what starts the invoice and payment timetable.
Forecast at least the next two payrolls and all other obligations.
Verify usable cash and any confirmed funding before relying on it.
Frequently asked questions
Can the client’s timesheet clause override my wage obligations?
A commercial approval clause does not remove the employer’s obligation to pay wages owed. Check the employment rules that apply and obtain advice promptly where hours or entitlements are uncertain. Keep the customer dispute separate from employee payment decisions.
Can I invoice before the timesheets are approved?
That depends on the contract and invoicing arrangement. Check the agreed trigger and supporting evidence requirements. An invoice issued too early may be rejected and create more delay. Seek agreement on processing undisputed work rather than assuming your usual approach is accepted.
How much payroll reserve should I hold?
There is no universal number of weeks. Model payroll, employer costs, other commitments, customer approval delays and payment behaviour. Use that forecast to set a reserve and review it when placements or customer concentration change. The aim is a workable buffer grounded in your operating cycle.
Protect payday and resolve the bottleneck
Establish what workers are owed, pursue the precise approval problem and forecast through cleared payment. Any funding decision should support that plan, with a credible source of repayment.
Planning Cash for Your Labour-Hire Payroll?
Fairlane Finance can help you assess possible funding structures against your business’s cash-flow timing.
General information only. This article does not constitute financial, credit, legal, tax, accounting, compliance or valuation advice. Finance is subject to lender approval, eligibility criteria, terms, fees and conditions. Consider obtaining independent professional advice for your circumstances before acting.
