Take the Pain Out of Construction Payments
It is no big secret that cash flow is one of the most decisive aspects to ensure operational efficiency in the construction industry. Construction payments can be dubbed the Achilles’ heel of most construction companies. The most successful companies can crash down to their core if they do not have a proper construction payment collection process. An inconsistent construction payment process not only messes up the business’s cash flow but also puts it at risk for payment disputes, unbalanced general ledgers, and liability issues. In the long term, a company with payment problems or cash flow disruptions will likely lose clients and referral opportunities. Construction payments thus are integral to all stakeholders in the AEC field, be it general contractors, business owners, or sub-contractors! This article will explore the top causes of financial issues and payment discrepancies in the construction industry and learn how BUILDFitters helps avoid them.
Miscommunication and process delays are the biggest cause of problems in any project. When it comes to critical components such as payments, this problem is even more pressing as it directly impacts the project. Communication issues can arise at any part of the project. Whether poorly calculated quotations, inconsistent terms, and conditions, missing information on purchase or change orders or missing contractual clauses – all these communication errors will result in delayed timelines. This means extra costs and cash flow disruptions.
A construction management platform such as BUILDFitters is an all-in-one solution to untangle this financial mess. The BUILDFitters platform offers many robust features to its users that help streamline communication. Furthermore, it also provides a variety of integrations that simplifies collaboration. For example, BUILDFitters offers integrations with many accounting and ERP solutions to make purchasing and invoicing easy. BUILDFitters also offers a purchasing module that makes it easy to shortlist vendors and manage purchasing cycle starting from vendor selection to PO generation and management. BUILDFitters integrates withproject management tools such as Wrike and MS Project Online making it easier to manage tasks. It further integrates with MSFT Teams, Office 365, Excel and SharePoint making document sharing and communication easy.
In addition, BUILDFitters also empowers users to create project teams directly with Microsoft Teams and helps maintain a centralized repository for communication throughout the project’s lifecycle. The team can then share all project-related documents, pictures, recordings, etc., on the platform. Video meetings and co-editing features are also a part of BUILDFitter’s collaborative feature set.
Most construction businesses price their projects as ‘lump sum bids’ – which is not the most efficient way of billing. The problem with lump sum bids is that they are harder to adjust when and if the quantity or scope changes in the billing cycle. This results in the company under or over-billing the customers. These miscalculations translate into disrupted payments and cash flow inconsistencies for the construction business.
BUILDFitters helps solve all these pain points with a smooth, hassle-free bidding management process that allows for quick and reliable estimates across the pre-construction and construction phases of the project. The BUILDFitters dashboards are designed to show all bidding information against active contracts to help project managers easily track down data. Furthermore, BUILDFitters also helps reduce turnaround time for associating bids with contracts with its automated features. All in all, BUILDFitters’ automated and bidding capabilities streamline bid management, saving time, resources, and effort.
Disputes with change orders:
Every construction project undergoes some sort of change, which usually comes with cost and time implications. Construction project managers need to take approval from their clients before they go ahead and make a change in the project. Failure to get the client involved can result in messy disputes. That is where change orders come in. A change order modifies the initial contract between the customer and the construction firm. Manual handling of change orders leads to various issues despite providing a detailed process.
Paper-based change orders are likely to get lost or delayed. If there are multiple change orders for the same task, the project team can get confused between the latest version of the document. Furthermore, there is also the possibility of manual errors in the change order, which can result in additional problems.
BUILDFitters offers an easy solution for these problems as well! BUILDFitters allows project managers to create, update, and track change orders on the cloud to recalculate estimated costs throughout the project’s lifecycle. It offers prepopulated fields and automated workflows that reduce manual errors. BUILDFitters also has in-built change order templates that can be generated with a single click. Exporting change orders into Excel online or in any other static worksheet is also possible with the BUILDFitters construction management solution.
Growing business = growing accounting complexities:
Growing businesses often encounter ‘growing pains,’ especially in the construction industry. These pains typically involve complex accounting and contract administration, vital to project success and evolving alongside the business. Suppose a company does not have an efficient contract management process, cannot justify costs, or faces budget overruns. In that case, they are susceptible to construction payments and cash flow issues.
BUILDFitters helps growing construction companies overcome these complexities by providing advanced financial features that cover all aspects of the construction project’s lifecycle. BUILDFitters is a fully integrated solution that supports the project’s sales, pre-construction, construction, and close-out phases. It has advanced features such as bidding management, budget management, change order management, contract management, project bid tracking, proposal generation, project estimation, and analytics tracking.
BUILDFitters integrates with popular accounting and ERP systems like Foundation, Business Central, Dynamics AX, GP, QuickBooks, Sage, and SAP, offering a comprehensive package to customers!
Construction management software such as BUILDFitters helps AEC companies stay on top of financial matters and limit cash flow problems.
The construction industry must embrace new software for finances and payments, moving away from manual paper processes. BUILDFitters simplifies construction processes that then go on to eliminate issues that can cause discrepancies within construction payments.