In addition to increases in material costs earlier this summer, transportation and fuel costs also spiked in August, making it even more difficult for businesses to cut costs on goods and optimize spending on current projects and future growth opportunities.

Given the economic realities of last year, and the challenges of this year so far, leaders in the construction industry should look to source more opportunities for cost savings to help stabilize operations and alleviate the effects these challenges are having on the business and employees.

Interesting enough, leaders can look within the finance department to help with these issues by implementing new technology that reduces costs while also improving employee morale and senior leadership satisfaction. New innovations strengthen the existing tech stack while also helping to streamline business-to-business processes, like the way construction companies pay bills—a process that has historically been largely manual, paper-based and time consuming.

Let’s dive into how automation technology can provide immediate relief and set construction businesses up for success in the future.

Streamline Back-Office Processes

The number one benefit of a back-office automation tool is the technology’s ability to streamline and speed up the payments process for all parties involved, including general contractors, subcontractors and additional suppliers. Gone are the days of printing checks, stuffing envelopes and mailing checks with little to no visibility into payment status or calling to ensure payments were received by the right employees. Automation allows 24/7 visibility into the status of payments and the ability to pay, and get paid, remotely on a jobsite via a few clicks. Additionally, automation allows general contractors and subcontractors to pay different suppliers across multiple projects via electronic payment methods, all of which are recorded in the platform to create more control over cash flow.

Increase Cost Savings

 According to Goldman Sachs, about 80% of all B2B payments for small and medium-size businesses are made by paper check. That means 80% of small and medium-size business leaders are spending dollars on printing paper checks and buying stamps and envelopes to complete vendor payments.

These costs can add up quickly depending on the size of the construction project and the volume of supplier payments that need to be processed per project. By eliminating manual, paper-based tasks, and implementing an automated accounts payable solution, construction companies will save time and money. The cost of a stamp may seem nominal, but it becomes material when businesses are managing multiple commercial construction projects with hundreds, or even thousands, of payments. By reallocating the dollars once spent on printing checks, buying envelopes, stamps and making trips to bank, companies can invest in higher-grade building materials, fund more projects simultaneously, or create a “cushion” to cover unforeseen needs on the jobsite.

Improve Employee Morale and Senior Leadership Satisfaction

Many businesses struggled with employee morale last year. In fact, two out of three said maintaining employee morale had been a challenge, according to SHRM.org. To help curb this decrease, an accounts payable automation tool offers employees, specifically those who work in the back-office, several improvements in their day-to-day work stream. For example, finance teams no longer have to make daily trips to the bank or reprint invoices that were lost on jobsites, saving time and creating more opportunity to focus on career-enriching projects. Additionally, the visibility a back-office automation solution offers project managers, contractors, and vendors into payment status can improve relationships and provide enhanced oversight into today’s, tomorrow’s, and next year’s books and projects—helping to ease stress about the future and drive more effective decision-making around the current construction projects at hand.

Takeaway

 As business leaders in the construction industry continue to face the unique challenges brought on by the pandemic, sourcing and implementing the right technology is a viable solution to many of the cost-saving and operational issues the industry is experiencing today.