All businesses require accurate and efficient payment tracking and cash flow management. But when you’re in the construction industry, this aspect of the business becomes even more important.
Where other businesses typically receive money from clients or customers, the construction industry typically has to handle funds coming in from multiple sources. On any given day, a contractor has to organize documentation and funds from subcontractors, suppliers, clients, and other important stakeholders. And that’s just one aspect of the business. On top of finances, operations is also a major concern, as is making sure that everyone in the team is aligned and on the same page.
Given the fast paced nature of the industry, it’s typical for firms to start misplacing important documents. Tracking cash flow as well as monitoring which invoices have to be sent out and which ones have been settled can be confusing. And juggling all this paperwork can be tedious and time consuming.
Such mistakes can be costly. And the easiest way to prevent them is by implementing a construction management software (CMS) to help improve your payment tracking cash flow. How? Take a look at the top reasons below–
1. CMS ensures that the right people are kept in the loop
To expedite payments, you have to make sure that your invoices are received by the right people in charge and that they are able to track this efficiently. A CMS can help identify which people are actually in charge of what and accurately track paperwork.
Using a CMS equipped with the right monitoring features helps streamline the whole billing process. Not only will it ensure that the billings are addressed to the right person, but you also know that payments are delivered to the right place.
2. Ensures that the right payment forms are available and accessible
There are numerous transactions that take place once a project begins. To keep a close eye on what goes in and what goes out, it’s likely that your business makes use of multiple payment forms. Problems arise, however, when these forms aren’t readily available for your suppliers or clients.
CMS can ensure that invoices are submitted using the right forms. And because it’s available online, it is easy for your partners and suppliers to access these forms, process your invoice requests, and submit them with the correct documents.
3. Automated scheduling
Manually overseeing billings can be tedious and time consuming. Keep in mind that the construction industry is a competitive and fast-paced business. And as much as you’d like to manually go through all the numbers and books, you have to trust that an automated system can deliver even better and more accurate results.
A CMS can help you keep track of when checks are being released and how long invoices have to go through the approval process so that your billing submissions are optimized for the average payment life cycle of your company.
4. Manage receivables on time, every time
When you’re using a CMS platform to manage your payment tracking, everything is automated and transparent. This means you don’t have to manually chase money that’s past due and use up precious time and resources, which could be better spent on other equally important aspects of the business. With a reliable CMS in place, you will be able to stay on top of billings, monitor payment delays and regularly follow up on receivables.
Using construction-specific technology designed to manage processes and improve automation in your firm gives you a clearer picture of how you can further improve operations in your organization. CMS can help you identify potential problems in your company’s billing or cash flow system before it affects operations. And with better efficiency and financial management, you can definitely expect your construction firm to flourish and stand out from the competition.
If you have used CMS to manage your construction business and and want to share how it can help improve payment tracking and cash flow, feel free to share it with us below. If you would like to see how CMS can streamline your current financial systems, contact us today.