The construction industry has historically used manual processes in its business of building houses, office towers, bridges, factories and other structures. The process of constructing a building does not lend itself easily to automation. Only the most standardized structures can be built on an assembly line and shipped to a job site for final construction.
The challenge facing the construction industry in automating processes is complicated further by the myriad of local, state and federal building codes and regulations; and laws affecting mortgage lending, liens, and payment of suppliers and sub-contractors. This complexity is exacerbated by the paper work required to satisfy these laws, codes and regulations. It is no wonder that the construction industry has a long way to go in automating its back-office processes including accounts receivable. This delay has caused significant cash flow problems for the construction industry.
The cash flow problems caused by using manual accounts receivable systems in the construction industry have been a great burden for many contractors. Delays in invoicing and payments often cause construction companies to take out short-term loans to keep projects going. When borrowing is not possible, construction companies are sometimes forced to decide who needs to be paid first. Limited payments are made to sub-contractors, suppliers, employees and owners in that order to keep operations afloat. This situation can make it very difficult for a construction company to hang on to its employees, suppliers and sub-contractors. Cash flow is one of the main impediments to growth in the construction industry. Here’s how an automated accounts receivable system can help to improve your cash flow.
Automated accounts receivable systems have invoicing modules which allow you to set up an invoice template for clients, so that you are not starting from scratch each time you need to issue an invoice. This reduces the opportunity for errors and missing information, which can result in delayed payments.
Documents which are critical to facilitating timely payment in the construction industry can be attached electronically to an invoice, further reducing reasons for your client to delay payment.
Invoices can be set up for automated delivery to expedite the process and keep your cash flow moving.
Notes can be kept online regarding the status of an invoice, such as client disputes and collection calls, facilitating follow up on past due invoices.
Important documents such as liens, releases or permits can be managed more efficiently with an automated accounts receivable system which has work flow capability. Final copies can be sent electronically to clients, expediting the payment process.
Trade credit reports can be accessed through an automated accounts receivable system. You can easily check a potential client’s credit history to avoid possible payment problems.
Automated accounts receivable software which includes these important features is available from Anytime Collect, a leader in the field with a track record of assisting construction firms. If your firm would like to learn more about how you can improve your cash flow with an automated accounts receivable system, please contact Anytime Collect at www.anytimecollect.com.
Where does the construction industry land?
Find out in this report.