The building industry is central to the economy; however, construction has been plagued by rising costs, stagnant productivity, high waste, and low margins for decades, according to Payapps Pty Limited.
The all-too-familiar stories of hardcopy paperwork like progress claims, and the hours spent processing them, highlights the industry’s relatively slow adoption of technology, both in the back office and for those working onsite.
While there have been improvements, says the company – predominantly through the digitisation of project management functions and the use of mobile technology – the reality is the industry still lags behind the technological and organisational change of other sectors.
“Inefficient processes don’t just hurt head contractors; they have affects right along the supply chain, especially when it comes to managing subcontractor payments.
“At Payapps, we’re all too aware of the fragmented approach when it comes to managing progress claims and supply chain collaboration. Despite the potential benefits, there’s still often a reluctance to adopt more efficient technological solutions in favour of what’s familiar.”
Key issues needing solutions:
For builders
• Claims not being submitted on time
• High risk of human error when calculating claims, tiered retention and managing compliance
• Receiving inconsistent and error-filled paperwork
For subcontractors
• Predicting cashflow
• No transparency into status of open claims
• Time spent on paperwork
Ultimately these issues result in lost opportunity for builders. Claims are regularly received in different formats, and are often filled with inaccuracies when it comes to items like retention or claiming against the agreed scope of works. The time spent chasing paperwork extends the payment timeframe, increasing the risk of delayed payment, while increasing the loss of valuable team hours to unnecessary productivity challenges.
For subcontractors, late payment impacts them where it hurts most – cashflow. Using paper-based or email systems to manage cashflow and the ability to forecast effectively is limited due to inconsistent processes and lack of collaboration with their builder. As with builders, subcontractors lose valuable time by spending hours reconciling previous and current claims manually.
Cloud-based collaboration tools like Payapps are all about getting the paperwork out of the way so teams can focus on higher value tasks. They ensure accuracy and consistency when submitting relevant information. And because all parties are working from the same set of numbers, there’s improved visibility across the claim approval process and less chance of payment disputes. Then there’s the additional value by being able to integrate with leading enterprise resourcing platforms (ERPs) or accounting software like Xero and MYOB, reducing the need for duplicate data entry.
“At the end of the day,” says Payapps, “margins are getting tighter, every advantage counts, the construction environment is changing and benefits of digital transformation are real.
“To put it simply, there’s a better way,” says the company. Keeping progress claim management simple and transparent, while being fair and compliant and fostering collaboration, is what makes such a significant improvement on the traditional ways of submitting and certifying progress claims.
Learn more at payapps.com/nzconstruction.