The construction industry is everchanging. New technologies are quickly emerging on the scene, improving the day-to-day tasks of contractors, developers, site managers, and labor workers. While the industry has started to embrace technology in the field, the accounts payable departments at construction companies have traditionally been left to manage B2B payments using outdated, manual processes. Often there is a perception that new payments technologies will require additional and costly resources. Or, they’re simply unaware that there is a better solution specifically tailored for construction payments.
In construction, every project is like running a small-business. There are multiple companies with different owners involved, including local vendors and specialty subcontractors. The result is an overwhelming pile of invoices with varying remittance details that need to be processed in a certain way. A great deal of time and resources are wasted when cutting checks and reconciling payments to multiple suppliers, instead of focusing on more meaningful, profitable activities.
The unique payment complexities of the construction industry are driving more companies to move their traditional processes towards accounts payable automation. Two critical areas of the construction business rely heavily on payments — vendor relationships and job progress. Thinking more strategically about how payments are made can make a big impact in these areas. Adopting a payments solution that keeps jobs moving with faster vendor payments gives construction companies greater control not only of the accounts payable process, but also their entire project and business.
AP automation is not one-size-fits all. It can be tailored to the construction industry, to a specific workflow, or to a particular type of AP software. Further benefits can be realized when processing and analyzing contractor expenses, ultimately allowing you to build more accurate project estimates, and monitor spending in real-time against sub-contractor invoices.
Automated payments solutions also offer analytical tools that help anticipate issues before they occur. Detailed reporting capabilities identify potential conflicts in the billing process like duplicate invoices or double payments. Meanwhile real-time controls let you track expense changes 24/7 and ensure your project costs stay in-check. The best part is, you can do all of this while generating rebate revenue, staying on budget, and improving profitability estimates.
And let’s not forget about fraud. Construction companies made up almost four percent of occupational fraud cases in 2016. AP automation prevents both internal and external fraud by intuitively detecting payment patterns, establishing concrete approval processes, identifying invoice discrepancies, and flagging vendor errors.
It’s time for the construction industry to embrace technology in back-office departments and build an AP process that generates new revenue with full visibility over spending. Construction payment challenges may be complex, but the opportunities and benefits associated with an automated solution are quite clear.