Construction companies can be crippled if they can’t pay suppliers on time, pay their workforce and deliver on their project portfolio.
Cashflow is the lifeblood of the construction industry and for subcontractors getting paid on time is crucial to a business’s cashflow requirements.
This is even more important in the current climate where worsening skill shortages have resulted in construction job vacancies increasing by a massive 80 per cent since late 2019, making retaining skilled workers imperative.
But no pay means no workers.
Accounts payable is a critical business requirement and because of its high-volume nature, it can cause a lot of issues for construction companies. There are so many ways an invoice can fail – duplicate invoice numbers, invalid ABN, no PO number to name a few. It can be an admin nightmare when something goes wrong and accounts can’t be paid, with time-consuming back and forth to get it right.
A Bond University study found that work pressures are the main source of stress for construction project managers, affecting their ability to do their jobs. The last thing anyone on a project site wants is added stress from wondering if invoices have come in and are being paid correctly or having to fix things when they’re not right.
Invoicing in the construction industry can be especially time-consuming, as it involves several steps and can be complicated by factors such as project changes, multiple stakeholders, and complex invoicing structures. The amount of time invoicing takes will depend on a variety of factors, such as the size and complexity of the project, the number of invoices to be generated, and the systems and processes in place for managing invoicing.
Understandably, it's challenging to establish a streamlined invoicing process when many businesses rely on manual processes and multiple stakeholders and approvals to pay invoices on time. Thankfully there's a way to streamline back-office processes to take the headaches out of invoicing.
Say hello to SaaS ERP and goodbye to complex invoicing processes
This is where the use of technology such as Software as a Service (SaaS) Enterprise Resource Planning (ERP) solutions can come into play to streamline the invoicing process and reduce the time and effort required to get paid for completed works. Automating invoicing tasks and seamlessly integrating invoicing with other systems can help to save time, reduce errors, and increase efficiency, freeing up staff to focus on more important tasks.
TechnologyOne, is a SaaS vendor based in Queensland and offers an integrated software solution to help the construction industry with invoicing. The software solution has supported construction companies such as BMD, JWH Group, BGC Group and more, with streamlining systems and processes.
SaaS ERP systems can provide real-time visibility into project costs, which can help construction companies more accurately track expenses and completed work. Helping avoid invoicing errors and delays and facilitating quicker payments.
Invoicing also requires substantial resources and funds to keep processes and systems in order, and ensure work is performed correctly and accurately. Implementing an integrated software solution with financial management capabilities can save a business time and money.
TechnologyOne Industry General Manager, Luke Fleming, said that without the right technology, processes, and systems in place, invoice processing can cause unnecessary headaches for construction businesses.
“Invoices can fail in a million different ways and late or unpaid invoices can cripple any business. Working with our intelligent automation engine the TechnologyOne team have developed an industry specific solution that provides automation, control, and efficiencies within the invoicing process and management of exceptions to those invoices,” said Mr. Fleming.
Intelligent automation is utilised within SaaS ERP systems to automate much of the invoicing processes, including the management of invoice exceptions. This functionality can save time and reduce the administrative burden on staff. Research has found that intelligent automation typically results in cost savings of 40 to 75 per cent.
With AI capabilities a SaaS ERP solution can be tailored to align with your specific business processes and management style. Following a set and forget like approach, during software implementation rules can be designated by staff that the system follows through the use of automation technology, enabling the simplification of complex invoicing processes and the elimination of administrative work.
Automation also helps avoid human error, everyone makes mistakes but with AI those errors can be caught and rectified following standard processes. Exceptions to invoices can also be managed automatically through the system and its rules-based exception engine ultimately providing efficiency for the whole business enabling your contractors to be paid faster.
Improve accuracy and efficiency with integration
SaaS ERP software solutions can seamlessly integrate with other solutions to provide a more streamlined and cohesive invoicing process. This can reduce the likelihood of errors and inconsistencies and can help to improve communication and collaboration between different departments and stakeholders.
“Having worked in the construction industry, we understand the sheer volume, amount of man hours and potential human error that can occur when it comes to invoice processing.
“That’s why we have developed integrated intelligent process flows to streamline business processes and take the heavy lifting out of tedious and time-consuming tasks,” Luke Fleming said
Overall, SaaS ERP solutions can help construction companies to improve invoicing process, efficiency, and timeliness, which can ultimately lead to better financial management and greater profitability.
TechnologyOne offers a software solution built for Australian construction that offers more project visibility than a hi-vis vest. For more information on how intelligent automisation can reduce your invoicing headaches from industry expert Luke Fleming and a live software demonstration, register for our Financial Management webinar here.