How AP Payments Solutions Benefit Construction Companies
Working in the construction industry, you undoubtedly recognize how the industry has changed in recent years. Construction companies are being forced to operate in an increasingly competitive environment. There is a rising need for skilled labor within the industry, yet there is a shortage of available talent. Along with this, technology is changing the way that construction is done, forcing construction companies to be agile and to seriously consider investing in things like drones and wearable technologies.
Ultimately, construction companies of all shapes and sizes must take a good, hard look at what they can do to remain competitive in such an environment. One potential way is to better manage their payables. Because cash is king in virtually every type of business, your construction business can gain a substantial advantage by investing in construction AP solutions. Whether or not you feel like your company has a good handle on its accounts payable, construction AP payments solutions can optimize your company’s cash flow.
The Substantial Embedded Value Within Construction AP Solutions
Construction AP solutions can provide a wealth of value to your construction business. But what are some of the (several) key benefits?
To start, construction AP payments solutions can help your organization cut costs. For many construction companies, this is the primary benefit. Construction B2B payments can be complicated. Between the vast number of subcontractors on a particular job and the sheer number of invoices that must be handled, managing your accounts payable is a full-time job. In fact, one estimate is that accounts payable accounts for roughly 75 percent of your accounting department’s time.
By taking advantage of construction AP solutions, however, your colleagues in your accounting department can eliminate much of the paper that is flying around. They are able to see all of their payables on one clean dashboard. With all of this information at their fingertips, they can monitor their cash flow 24/7, ensuring that they are not facing any cash crunches in the future.
Moreover, with good cash flow management, they can help your company avoid late fees or even the need to take on debt to settle its payables. As your construction company grows, these challenges only grow in intensity, but it also means that your construction AP payments solution can potentially save you even more cash. The proof is in the numbers. According to one study by Sterling Commerce, accounts payable automation software can result in cost savings of up to 90 percent. This is a huge number and goes to show why software can put a significant dent in your company’s operating expenses.
The cost savings benefit is an important reason why construction companies incorporate accounts payable automation software into their businesses. But having said that, there are other important benefits for both large and small construction companies.
Closely tied with cutting costs, construction AP payments solutions can give you increased control and visibility into your payments. You can better manage job costs, change orders as necessary, and review all invoices and documentation from one platform. Better yet, with most construction AP software, you can actually do this when you are away from your desk. This is a huge benefit — especially if you are meeting with colleagues or even subcontractors at a construction site. Instead of needing to call your colleagues at the office or run back and look at a particular invoice, you can do it all remotely.
Beyond mobile access, however, this increased control and reporting will make your construction company more efficient. And this leads to another benefit of construction AP solutions. That is the time that you can save with AP payments solutions.
The vast amount of time saved is a key benefit of any notable software-as-a-service solution, but it is especially true in the construction industry. The industry still has a significant amount of paper flying around, whether it is a contract or an invoice for additional work on a job. This problem becomes even more real when you are dealing with many subcontractors and other vendors.
Instead of tracking those payments by hand or writing out paper checks, you and your company can take advantage of construction payments automation. Leveraging increasingly sophisticated B2B payments technology and processes in these solutions lets you and your colleagues focus on other pressing tasks, whether that is identifying terrific opportunities for reinvestment or finding new subcontractors that can offer more competitive rates. Essentially, you are able to free up an extensive amount of time in order to create more value for your construction company.
Finally, one of the best things about construction AP payments software solutions is that it can strengthen your vendor relationships. This isn’t a zero-sum game. Optimizing your cash flow can be a game-changer for your construction business, especially if it is having trouble handling its payables.
But having said that, whether you are facing a cash crunch or not, construction AP payments solutions can have an immensely positive effect on your subcontractors and other vendors. Critically, you can manage their expectations. Surprises don’t occur here. With construction B2B payment services, you shouldn’t need to extend payment terms or pay your vendors late. However, if you approach that scenario, you will easily be able to notify your vendor before the due date. In a field where relationships are so vital, this is a huge benefit. Ultimately, AP payments solutions can help you maintain and improve those relationships.
Making Your Work Much Easier
These are just some of the benefits of streamlining AP payments with software and software-as-a-service solutions. Those who work in the construction industry undoubtedly understand that B2B payments can be complicated. You have to constantly monitor your cash flow while ensuring that your payables are sent out in a timely manner. This is a difficult balance and one that requires constant supervision and judgment.
With AP payments solutions, however, you are able to make more objective judgments for your business. They can not only improve the health of your business but improve your relationships with subcontractors and vendors. And perhaps most importantly, they can make life easier for you and your colleagues.
At Finexio, we are proud to offer an AP payments-as-a-service solution that can offer you all of the benefits discussed above. Our tools and processes can help your construction company easily manage your payables and better manage your cash flow. Moreover, it is easy to implement. You can use your existing software and processes in conjunction with Finexio. To learn more about how we can help you with all of your accounts payable needs, feel free to contact us.