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Finding your Construction Payment Technology MVP

 

Finding Your Construction Payment Technology MVPGeneral contractors are under growing pressure to deliver projects on time and on budget, while keeping an eye on their own margins and ensuring that risks are appropriately managed. Managing the construction payments process involves a significant amount of complex and onerous administrative activity, and collaboration technology can help by streamlining and automating tasks, increasing transparency and control, and generally improving communication across project participants. But not all tools are created equal. When evaluating potential technology partners, here are some key concepts to consider before making a choice.

 

Lien Waiver Management

Managing the lien waiver process is the construction payment management area most fraught with risk – and one where the right technology can make a major impact. A failure to ensure proper lien waiver management processes can expose a general contractor’s clients to complex project handover complications and financial risk. More than just serving as a way to store or send waivers, a robust payment management tool should help to simplify, automate and standardize the lien waiver process. That includes making the tracking and digital exchange of lien waivers easy for all parties – all the way down to the sub-tier level – and preventing payments when waivers are missing or incorrect.

Compliance Management

Ensuring all subcontractors, material suppliers and others involved with a project are insured and have submitted – and have kept up to date – all required compliance materials requires considerable time and effort. In addition, failure to adequately manage this process invites risk that can result in added costs and delays. Technology can help here as well, enabling organizations to manage risk and to redirect the many hours spent manually collecting, tracking and storing compliance documents to value-added activities that drive growth and opportunity. A robust and collaborative payment management solution improves both efficiency and control by enabling customized compliance requirements and enhancing visibility into compliance management status whenever and wherever it is needed by project team members. Such technology also can automate notifications to subcontractors when documents are expired or missing and even automate payment holds in such cases, adding another layer of protection.

Electronic Payments

Choosing electronic payments over paper checks doesn’t just save businesses time; electronic payments also save money. Research shows that direct, electronic payments on average cost payers 10 times less than paper-based check processes. Considering the high volume of checks general contractors cut for subcontractors and material suppliers on large commercial construction projects, such savings could prove substantial. In addition, choosing a payment management solution with the ability to provide electronic payments helps the payment process run smoothly, driving efficiency for all parties and reducing the uncertainly surrounding payment wait times for subcontractors.

Training and Support

It’s also crucial to consider what happens after a technology partner is selected. The lack of sufficient training and support can prevent businesses from receiving the full benefits software brings to the payment process. A dedicated support team ensures all users, both within the organization and across project partners, understand how to use the solution at launch, while also providing support over the long-term as needed. This can both reduce time to value and enable the organization to maximize the value received over time.

Construction payments are about more than just accounts payable. A solution that truly creates value brings project partners together in a way that boosts efficiency, enhances transparency and mitigates risk for all.

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