Optimizing Construction Invoicing: How Buildfitters Streamlines Financial Success
Achieving success in construction management is highly dependent on accurately measuring and monitoring cash flow through invoices. In recent years, invoice management has become crucial to keep processes streamlined. This surge in importance stems from the fact that bolstering the financial strength of a construction firm depends on effective billing and budgeting practices.
Therefore, finding a good invoicing solution can be a game-changer for general contractors (GCs). Contractors can modernize their billings to avoid human errors and lag time, enhancing cash flow and work productivity. Automated invoice alerts also minimize the number of past-due invoices. An invoicing solution in this context can be useful, enabling several automated business activities while simplifying income and boosting worker efficiency simultaneously.
Choosing the right software, however, can be a little daunting since factors like cost, user interface, tools, adaptability, and integration may vary from project to project. This is where BUILDFitters’ construction invoicing software features come into the picture. BUILDFitters provides GCs with multiple invoicing methods to utilize the same tool for different projects. In simple terms, BUILDFitters’ invoicing tool enables GCs to accomplish more in less time.
This article will delve into the basics of construction invoicing and showcase the advantages construction professionals can gain from utilizing BUILDFitters’ construction invoicing solution, emphasizing its features and methods.
Why is construction invoicing crucial?
Construction invoicing is key to managing and sustaining financial stability in the construction sector. It is the process of creating and sending out invoices for the labor work executed along with the equipment or materials obtained during construction projects. But what does construction invoicing software entail?
It takes more than just delivering an invoice to the customer to complete a construction invoice. It requires careful consideration of detail and adherence to agreements. An invoice typically contains all the necessary legal information (not necessarily limited or bound to) details like:
- Name of the project and client,
- Invoice registration number,
- Duration of the project,
- Contract,
- Change order amount(s),
- Total cost of work completed to date,
- Current amount due, and
- Total balance due for the project.
To support the payment claims, GCs can also attach supporting documents like schedules, invoices of subcontractors, and lien waivers. The purpose of this document is to show a transparent and fair invoicing process.
Navigating invoice automation with BUILDFitters:
Accurate calculation of invoices is important for both parties: contractors and clients. The correct calculation method is the building block of accurate invoicing. Miscalculated amounts can lead to avoidable workplace disputes, disagreements, and delays in payment reception. Choosing accurate methods to calculate construction invoices is the prudent approach to avoid these issues altogether.
With BUILDFitters’ construction invoicing solution, contractors can choose the calculation method that perfectly aligns with the terms and requirements of their agreements. . They can do fixed bid invoicing based on milestone completion. These milestones can be driven from project schedule and task completion, or these milestones can be set manually with manual percentage completion. BUILDFitters also allows for invoicing on time and material contracts based on the actuals against the project. Users can set up an invoice schedule after creating contracts, projects, and sites under a particular project. Details like price list, duration, and total cost are all available under the project.
Let’s go through all the invoice automation options that BUILDFitters provides.
Fixed price:
BUILDFitters’ construction invoicing software allows invoice automation for fixed-budget projects based on milestones or a billing frequency. These projects involve a predetermined amount that will be spent. The details of this amount, like the total budget available and the project cost, can be seen in the budget tab. Remember, there can be multiple milestones under one project.
1. Schedule-based projects:
Not selecting the milestone option allows creating an invoice generation schedule that may be weekly, twice a month, or as per the requirement. BUILDFitters’ invoice automation also enables the selection of the day for generating the invoice. For instance, if you choose Thursday on a weekly basis, the software will generate an invoice every Thursday.
Once the schedule is created, the total amount of the project is divided into invoices per the project’s start and end date. This amount is taken from the price of the project. Creating a schedule means payments are ready for invoicing but haven’t been invoiced yet. The software will match the invoicing dates and execute the task by creating the invoice on the specified date, i.e., every Thursday.
In addition to checking invoices generated, users can also see the total budget assigned to the project and the total amount spent accordingly.
2. Milestone-based projects
Milestone-based invoice generation offers simplicity and clarity. This option can be used for projects with well-defined deliverables. Switching to the milestone option constricts weekly or monthly invoice generation on demand. Users can also specify tasks under a milestone after creating the milestone separately and choosing the end and start day. Once the project schedule shows milestones, decide on the invoice schedule.
The invoices can be generated per the project’s progress and completion. For example, writing 50,100 in the schedule means one invoice will be generated when 50 percent of the project is complete and the next one when it’s 100 percent complete.
After creating the timesheets and approving them, the system can track the project’s progress automatically. An invoice will be generated once the project reaches 50% completion status.
Variables (time and material):
BUILDFitters’ construction invoicing automation features also offer an alternative method, based on variables such as time and materials, rather than a predetermined fixed amount outlined at the contract’s outset. With this invoicing method, there’s no milestone-based invoice generation system; instead, it operates on a weekly, biweekly, or monthly schedule.
Utilizing this calculation method entails selecting a price list when creating a contract. The next step after selecting a price list is creating time sheets by entering the cost and prices of materials. The time, material, and other expenses on the timesheet will be used to calculate the total amount charged to the client. Therefore, time sheets should be created with careful consideration.
Once the timesheets are submitted and approved, the invoice schedule initially created will be updated. If the schedule is set to create an invoice every Thursday, the system will generate an invoice with the total amount based on the approved timesheet. Any purchase order created before Thursday will also be a part of this invoice.
Conclusion:
Thorough configuration of invoice schedules and multiple automation options allows GCs to enhance and streamline their operations. The BUILDFitters’ construction invoicing solution is an adaptable software catering to various needs under one platform. It offers versatile calculation methods and provides transparent financial transactions, a much-needed feature in the construction industry. Ultimately, this approach empowers construction experts to pilot through complicated invoicing processes.
If you are interested in learning more about BUILDFitters and how it helps you, reach out to our team of experts for more information.
