Most Alberta operators running construction and services contracts know the Prompt Payment and Construction Lien Act exists. What most don't know is that it runs a tight clock on their AP process - and that clock is already ticking on every invoice sitting in their queue right now.
The standard assumption is that prompt payment legislation protects contractors and subcontractors from slow-paying owners. That's true. What's less well-understood is the mechanism: the Act doesn't just protect contractors - it creates a binding legal obligation on the owner's side that most mid-market AP processes are not set up to meet. And when they fail to meet it, contractors have a fast-track legal remedy that runs in weeks, not years.
This isn't a problem for government procurement offices and major operators with compliance teams. This is a problem for $20M–$500M Alberta operators who are running their construction and services contracts through the same AP process they've been using for 15 years.
What the 28-day clock actually means
The PPCLA is clear: when a contractor submits a "proper invoice," the payment clock starts. You have 28 calendar days to pay it in full, or 14 calendar days to send a written notice disputing it. If you do neither - if the invoice just sits in your queue while someone reviews it, gets sick, or waits for a project manager to sign off - you are in breach of the Act.
A "proper invoice" isn't just any invoice. The Act defines it specifically: it must include the contractor's name and address, the date and the period covered, the contract it's issued under, a description of the work, the amount payable and payment terms, and the name and address of the person payment should be sent to. But here's the trap most operators fall into: once an invoice meets that definition, the clock starts on receipt - not on the date someone in your AP department notices it, not on the date it gets entered into your ERP, and not on the date your project manager gets around to reviewing the charges.
Many Alberta operators have their ERP configured with 30-day or 60-day net payment terms. That configuration is now a legal liability on any construction or services contract governed by the PPCLA. The Act's clock doesn't care what your ERP says.
The 14-day dispute notice - and what it has to say
If you have a legitimate dispute with an invoice - wrong rates, hours you can't verify, charges for scope outside the contract - you have 14 calendar days from receipt to send a written dispute notice. Not a phone call. Not an email that says "we need to talk about this." A formal written notice that specifically identifies the amount in dispute and the reason.
Most owners don't have a dispute notice template. When they do dispute an invoice, it happens informally: a project manager tells the contractor's field supervisor something is wrong; the AP team puts the invoice on hold; the issue drifts for weeks. Under the PPCLA, that process doesn't protect you. The invoice clock is still running. If 14 days passes without a written dispute notice, you've lost the right to dispute - and the full amount is due at day 28.
A verbal dispute isn't a dispute notice. A phone call saying "we need to look at this" isn't a dispute notice. If it isn't in writing, with the specific amount and reason identified, the clock kept running.
What happens when you miss both
If 28 days passes with no payment and no written dispute notice, the contractor has a clear path to adjudication under the PPCLA. Adjudication is a fast-track dispute resolution process - not a lawsuit, not arbitration - with adjudicators appointed through a government-approved Nominating Authority under the Act. It is binding. It is fast. And it heavily favors the party who followed the rules.
A contractor who triggers adjudication on an undisputed invoice is in a strong position. If the owner didn't pay and didn't dispute in writing within the required windows, the owner has very little to stand on - and may be on the hook for interest on top of the amount claimed.
The full process - from adjudication notice to binding decision - runs on a compressed timeline measured in weeks. That's faster than most payment dispute conversations between an owner and contractor.
The PPCLA isn't static. The Bill 30 amendments took effect April 1, 2025, and further regulation amendments followed in late 2025 (including a mechanism for consulting professionals to opt out of lien fund requirements). If your lien waiver, holdback, and invoicing language hasn't been reviewed since early 2025, review it with your legal counsel before the next major close-out.
Why mid-market AP processes fail this test
The PPCLA is designed for a world where AP teams actively manage construction invoices against the clock. Most mid-market operators are not operating in that world. Here's what the process typically looks like:
An invoice arrives by email, or is dropped off at reception, or gets submitted through whatever system the contractor prefers. It goes to an AP inbox. An AP clerk enters it into the ERP on whatever date they get to it - which may be two or three days after receipt. The ERP assigns a payment date based on the configured net terms - 30 or 60 days. The invoice sits in a queue until a project manager reviews and approves it, which may take another week. If there's a question about the charges, the PM calls the contractor, and the invoice goes on informal hold indefinitely.
Under the PPCLA, that process has at least three failure points: the receipt date is wrong, the dispute window closes without a written notice, and the payment date exceeds 28 days. On any given construction contract, this is happening with multiple invoices simultaneously.
Five AP process changes that remove the liability
Date-stamp invoices on physical receipt
The 28-day and 14-day clocks start on receipt - not on the date of ERP entry. Implement a physical or digital receipt stamp so there is no ambiguity about when Day 1 is. Train reception and anyone who receives contractor correspondence to apply it.
Update ERP payment terms on construction contracts
Audit your ERP vendor configurations. Any vendor on an active construction or services contract governed by the PPCLA needs payment terms set to net 28 (at most). A 30-day or 60-day default is a liability on every invoice from that vendor.
Build a dispute notice template and give it to PMs
When a PM disputes an invoice, they need to know that a phone call doesn't protect you. Build a simple written dispute notice template - one page, with fields for the invoice number, the amount in dispute, and the reason - and make it the standard tool for any disputed invoice. The notice goes out by email with read receipt, within 14 days of invoice receipt, every time.
Assign an invoice tracking owner
Someone needs to own a live list of open invoices against the 28-day clock. Not a general AP queue - a specific PPCLA tracking sheet for construction and services invoices, updated daily, with payment due dates and dispute notice deadlines visible. When invoices hit Day 10 without a decision, that person escalates. This doesn't require a new hire - it requires one person with a clear mandate and a 15-minute daily habit.
Brief your PM team on what the Act actually requires
The PPCLA creates obligations for everyone in the approval chain, not just AP. If a project manager doesn't review invoices promptly because "that's finance's job," invoices age out of the dispute window. Your PMs need to understand that a verbal "I'm not sure about this charge" is not a dispute notice - and that the 14-day window to dispute is shorter than they probably think.
What "proper invoice" means in practice - and why it matters
One of the most underused tools an owner has under the PPCLA is the ability to reject a non-conforming invoice before the clock starts. If a contractor submits an invoice that doesn't meet the Act's definition of a "proper invoice" - it's missing required information, it doesn't align with the contract's invoicing requirements - you can return it with a written explanation, and the 28-day clock doesn't start until the contractor resubmits.
This only works if your contracts include a specific definition of what a proper invoice looks like under your agreement - the information required, the format, the supporting documentation needed. Most standard services MSAs in Alberta don't have this. The contract says "invoices will be submitted monthly" with nothing more specific. That means every invoice is a proper invoice by default, and the clock starts the moment it arrives.
Adding a proper invoice definition to your standard contract template takes an hour of procurement work and eliminates a significant ambiguity in your PPCLA exposure. It's the cheapest protective clause you're probably not using.
The operators who will get hit by PPCLA adjudications are not the ones with bad intentions - they're the ones whose AP process was designed for a pre-PPCLA world and hasn't been updated.
Is your AP process compliant?
I built a 10-point checklist so you can audit your current process against what the PPCLA actually requires. It covers receipt stamping, ERP configuration, dispute notice procedures, PM briefing, and contract language. Each item maps to a specific compliance obligation under the Act.
If you're running construction or services contracts in Alberta and haven't specifically reviewed your AP process against PPCLA requirements, the checklist will tell you exactly where the gaps are.
This is general information, not legal advice.
Ten questions. Five minutes. Know where you stand.
The PPCLA AP Compliance Checklist audits your AP process against the Act's specific requirements - receipt stamping, ERP configuration, dispute notice procedures, and contract language. If you score under 7 out of 10, you have live adjudication risk on your current contracts.