The construction industry is more than bricks and steel. It is the spine of modern society. It provides the essential infrastructure in which we rely on our daily lives. However, construction companies have a pressure to function more efficiently as the supply chain volatility continues. Although most of the hard work continues in the field, the Back Office may be well positioned to meet these efficiency needs, helping construction companies to be profitable even at uncertain times.
An example of this is the automation of accounts to be paid (AP). The adoption of this technology will give your construction company a stronger financial base to support your business. Through the digitization and rationalization of payment processes, it will benefit from greater visibility and financial agility.
Industry sensitivity: a false economy
Compared to other industries, the construction sector has been especially slow in adopting technology that can offer benefits to saving labor. Several factors contribute to this attitude: preference to family methods, concerns about the implementation costs and the perceived complexity of adoption. Although they see the usefulness of these tools, construction companies often consider discretionary expenses that can be postponed when financial restrictions are narrowed.
However, this is a false economy. Although these companies think they save money, what they really do is lose cost reductions, which increases long -term expenses instead of decreasing costs. AP manual processes are slow and prone to errors. They turn on financial visibility at a time when clarity is more important. Late payment penalties, lost payment discounts, duplicate payments and other problems increase the costs of maintaining -with manual methods.
The imperative of financial visibility
When financial visibility is important, AP manual methods provide an unclear image. AP Automation solves this problem by replacing the monthly reports with real -time dashboard, which show detailed information on payments, cash flow and budget forecast. This type of visibility enhances agile decision -making that facilitates the time of economic storms.
You can quickly identify spending patterns, accurately provide for cash requirements, and make data -based decisions on how resources are assigned and projects are chosen. When combined with digital payment methods, such as virtual cards, these systems provide improved security and reduced fraud.
Reduce overload without sacrificing quality
Automation of AP reduces expenditure through three primary mechanisms:
Cut on manual processing costs
Manual processing requires managing paper, entering data and presenting documents. With the accounts to pay automation, the time you spend here is reduced to a few seconds. The invoices are managed electronically, the data is automatically extracted and the approvals are digital. Even better, staff has more time to focus on critical tasks.
Reduces late payments and penalties
With manual processes, the human error produces that some invoices are not paid on time or incorrectly paid. These late payments and errors involve rates and threaten vendor relationships and, thus, projects. Many sellers offer discounts for early payments, so even payments made on time could leave money on the table. Automation eliminates these errors and lost opportunities.
Rationalizes the management and communication of vendors
Material delivery time can make or break a project. Keeping strong relationships with sellers is directly translated into the success of your construction jobs. With automated systems, sellers also have transparency in your payment status, reducing payment queries and strengthening collaborations.
Make a commercial case for change
To overcome resistance to the adoption of new technologies, construction companies should take a gradual approach. Automation of accounts to be paid can be implemented in three phases, facilitating adoption:
- Appraisal: Start by identifying the bottlenecks in the existing AP flow of work. Calculate how long it has been engaged in manual processes, quantify error rates and use this data to calculate the actual cost of your current methods.
- Layout: Create a roadmap to overcome the bottlenecks discovered during the evaluation. Work with finance equipment and operations to identify the integration needs and ensure that any solution works within your existing systems (such as your ERP). Establish a realistic calendar, define what success is and identify the members of the team responsible for each phase of the launch.
- Evaluate: To evaluate the results of your pilot program by comparing key performance metrics, such as invoice cycle time, approval delays and error frequency, against the reference line. Surveys users to get feedback on usability and effectiveness. Use this knowledge to make adjustments before expanding the solution to additional equipment or departments.
- Ladder: Once you are satisfied with the results of the pilot program, post the solution to the whole company. Ensure -include comprehensive staff training so that the pilot program hits are repeated on a scale.
Getting purchase may be difficult. To reduce internal resistance, share success stories from all over the industry, compare your company with competitors who have made the change and calculate the most relevant ROI metric metrics for your company.
Aligning automation with business goals
Although it is implemented by the back office, AP Automation S’Alinea with various business goals:
- Resilience of recession: Reduced fixed costs and better cost management help maintain profitability during falls. Having less paper -based process also contributes to sustainability goals.
- Delivery of project acceleration: With the most fluent running, projects managers obtain approval faster, vendors provide faster materials and operations are more adaptable.
- Improved vendor relationships: Point and precise payments maintain strong supply chain relationships, an important factor during the scarcity of materials.
Building a better office
As economic uncertainty continues to fall, construction companies need to try to eliminate all forms of inefficiency. AP automation is a way to remove a large bottleneck and often ignored in construction operations. The cost savings that will be will help your recession proof company, providing you with the tools you need to keep you competitive. This makes this a need, not a luxury.
Your employees carry out all the projects in order to build structures that resist the elements. With AP Automation, your financial systems can benefit from the same resilience. Construction companies that are built in this resilience will not only meteorize current challenges, but also be awarded a base to emerge stronger when growing opportunities.
