How Procurement and Payment Automation Can Make You Everyone’s Favorite Customer

We’ve all known someone in the construction world who is an incredibly slow payer. Maybe it was your client who ignored invoice due dates. Or a competitor that your suppliers moved to cash-only terms.

Whatever your experience of delayed payments, you never want to be that company. Chronically overdue bills can harm your company’s credit rating and negatively affect your supplier relationships.

However, missing payments and overdue bills are rarely deliberate. Sometimes, it’s just a matter of invoices not making their way to your accounts payable team in time, invoices falling through the cracks altogether, slow processing times, or delays caused by manual data entry.

The good news is that you can avoid the potential consequences of late payment by connecting and automating your procurement and payment processes using your construction management solution. Let’s dig in a little more.

How Do Construction Payment Delays Happen?

Before looking at ways to improve our payment processes, we first need to examine how delays occur. Late payments are generally caused by one of two things: either your team is too busy to process purchase orders and invoices correctly, or your processes don’t include checks and balances, and it’s easier to miss things. In most cases, it’s a bit of both.

Since most construction companies work on payment cycles with hard cutoff dates, even a delay of a few days could result in an invoice being paid a month or more late.

In real-world terms, all it takes is for a project manager or procurement specialist not to pass invoices, orders and other documentation on to accounting or even to forget to process a return for payment to be late.

When you’re working on multiple projects with many different project managers and teams, it’s easy to see how this can snowball and get out of hand quickly. Add in complex manual processes, multi-step approvals, and overflowing  in-trays, and you’ve got a recipe for missed paperwork.

The more you rely on manual processes and the more people there are involved in processing any invoice, the greater chance there is that something could go wrong.

Great Customers Get a Better Deal

So far, we’ve discussed the negative effects of missed payments, but the opposite is also true. If your creditors can set their watch on your payments and you’re always up to date, you will build a positive reputation in the industry.

A stellar payment record gives your company negotiating power, translating into bigger discounts and other benefits. Furthermore, in the unlikely event that you do miss a bill, it will have a lesser impact on your finances.

Since some bids and projects might also require industry references, particularly when a single source product is being used, the lack of a supplier relationship could even win or lose important projects for you.

How Construction Software Improves Procurement and Payments

Like most things in the construction world, proper communication, collaboration, processes, systems and workflows are crucial to keeping everything running smoothly.

Connected construction software with built-in digital workflows, like Trimble Construction One, can help minimize hands-on work and human error.

Whenever a team member in a particular role takes action in their software solution—like a project manager submitting a requisition for materials required for a project—the information is visible to other departments, like procurement and accounting. Providing your team a single source of truth that spans the construction management platform.

This means that even though accounting won’t need to pay the bill for a while, they’ll be aware that it will be arriving in the future. When procurement has taken action on the requisition and generated a purchase order, your finance team will be able to link that with the invoice when it arrives.

Trimble’s Connected Software Solutions Brings It All Together

One of the most important benefits of using tools like Trimble Vista and Spectrum with your other Trimble Construction One software solutions is that because Trimble is building a connected software suite, it gives you easy options to automate data and workflows.

Because all of these tools are built to work together, it never feels like trying to fit a square peg into a round hole, and there’s no time-consuming and error-prone manual data transfer.

It also means that your teams can keep working with the tools they’re used to, so there’s less downtime, teething problems and learning curves to manage.

If you’d like to learn more about automating project management from procurement to payment cycle with Trimble, contact us today! We’re always happy to help with automation and integrations that take your business to the next level.