A continued supply chain lag, combined with a skills shortage, is making the case for smarter and sharper building management and digital tools more critical than before.
As New Zealand Building Industry Federation chief executive Julien Leys recently pointed out, New Zealand is no longer on the map for some global shipping and building materials companies with supplies only getting as far as Australia. This makes the case for digital tools that can provide heightened accuracy to track supplies, payments and progress claims even stronger.
Simple, easily integrated tools purposefully designed for contractors, subcontractors and builders are increasing in favour as the sector seeks to remove pain points, free up employee time, improve accuracy and leverage our buoyant economy. The last thing construction firms want is to be embroiled in payment disputes or haemorrhaging money through retention miscalculations and legal fees like in the Fletcher versus Spotless High Court case with Fletcher liable for $2 million thanks to strict interpretation around payment provisions, says management system provider Payapps.
Breaking down barriers
A nationwide BDO survey into challenges facing construction industry leaders reconfirmed retentions and reporting are top barriers to success. The researchers found an improvement in the number of companies saying they fully comply with regulations with an increased awareness of the importance of due diligence and inspecting client records to make sure retentions are held securely.
However, many companies are still slow to put this awareness into action, with 70% of respondents saying they haven’t asked to inspect their customers’ records.
Businesses working with manual systems or outdated IT are missing out on opportunities to improve their performance. This is especially true with the added challenges of COVID-19 and the propensity for businesses to succumb to pressure around margins and cashflow in challenging times.
“When it comes to retentions, automated calculations, time-stamped details, and an intuitive dashboard, Payapps lead the way,” says the company. It ensures subcontractors are provided with a payment schedule in a timely manner, with their details logged accurately ensuring policies and regulations are adhered to. Payapps also enables greater sector collaboration and simplifies the storing and tracking of contract and compliance information. It integrates with accounting packages such as QuickBooks, MYOB, and Xero with users able to review contract details and retention details. They can also see the impact of variations on retention and submit and confirm retention releases to ensure a smooth project completion.
“Investing in a management system like Payapps can positively impact cashflow, improve costs, margins and confidence among key stakeholders, such as financiers and regulators, and identify potential issues early on. It provides a digital trail of tasks completed and billed for and a stronger foundation for everyone in the sector to sustainably thrive.”
Learn about the top tactics to get your retention back at http://www.payapps.com/retentions.