While construction companies excel at building long-lasting structures, a broken-down or outdated bookkeeping system can completely derail progress and make daily operations difficult to accomplish. How can teams improve their accounting processes for better accuracy, efficiency and productivity? The answer is automation.
Bookkeeping isn’t just about keeping financial records; it’s a critical tool construction companies can have in their belts for project management, cost control and decision-making. By automating accounting, teams can more easily facilitate payments, bid on projects and upgrade cash flow. Let’s look at how to get started.
Managing Subcontractor and Supplier Payments With Automation
Managing payments in the construction sector involves tons of transactions with subcontractors and suppliers, each with their own contracts, payment schedules and documentation. Throughout any given workday, a crew may need to run and grab several supplies or materials from different stores, requiring a receipt and careful recording of every purchase. Additionally, companies must have documentation of all payments to subcontractors and suppliers to ensure every dollar is accounted for.
Without automation, staying on top of subcontractor and supplier payments can be a challenge. 52% of subcontractors and 40% of material suppliers cite general contractor mismanagement and bookkeeping issues as the source of payment problems, according to DigiBuild. Additionally, construction businesses struggle with wasted resources, reduced profits and a failure to meet payroll due to slow payments.
Manual handling of these payments isn’t only time-consuming but also prone to error, leading to delays and strained relationships with crucial partners. Unfortunately, humans are prone to make mistakes without a solution to check the numbers for them. If this happens continuously, subcontractors and suppliers may become frustrated, forcing the construction companies to seek other avenues to receive materials.
The Solution: Automating Expense Management With Dext
Automated invoice processing reduces manual data entry and the risk of errors. This enables teams to process payments faster, keeping projects on track, no matter what. Using Dext Prepare, construction workers can easily submit expenses using our digital tools, enabling transactions to be reviewed and approved quickly and efficiently.
Additionally, Dext Prepare stores all documents in the cloud, making it easier to manage contracts, invoices and receipts. It can act as a company’s personal library, enabling them to look up any receipts when and where they need them and provide visibility to their whole team.
Learn more about how technology can elevate your financial management.
Automating Accounts Payable for Improved Cash Flow in Construction
The construction industry’s payment cycles, characterised by progress billing and retainage, pose challenges in maintaining a healthy cash flow. Without proper cash flow, companies scramble to fund payroll and purchase the necessary materials and equipment for jobs, leaving them with very little wiggle room. Manual accounts payable processes can make these problems worse by delaying payments and obscuring financial visibility.
Performing monthly expense reporting and invoicing is a common business practice in this sector. While this keeps financial records updated, it doesn’t provide teams with real-time insights to properly plan for the future. Waiting for these reports on performance leaves businesses in the dark about how much money they have to work with, which can ultimately lead to financial hardship and uncertainty.
The Solution: Enhancing Cash Flow With Dext
To solve the cash flow problem, construction companies need insight into the money coming in and out of their accounts. Dext Prepare provides real-time visibility over expenses, making it easier to manage cash flow for subcontractors, supplier payments and other vital purchases.
With Dext Prepare, teams can continue operating amidst unexpected change orders, slow-paying customers, delayed invoices and project delays, giving them business continuity and the ability to plan for the future. The solution’s accurate data collection makes budgeting a breeze, giving construction crews the information they need to allocate funds and prioritise spending.
Find out how cash flow planning can help future-proof your business.
Leveraging Automated Bookkeeping for Better Project Bidding
To create accurate project bidding, construction business owners or managers need a deep understanding of their financial health and historical project costs as well as the ability to forecast profitability. Manual bookkeeping methods often result in outdated or inaccurate financial data, making it difficult to submit bids that are both competitive and valuable.
To create a thorough bid, businesses must:
- Be accurate in measurements and financial information.
- Assess and manage risks.
- Check their profit margins.
- Properly fill out bidding paperwork.
Outdated bookkeeping practices often lack robust analysis and reporting capabilities. This makes it difficult for companies to learn from past resourcing and job costs. Without these actionable insights from financial data, teams cannot optimise their bidding strategies or make informed decisions to pick up profitable projects.
The Solution: Automating Bookkeeping With Dext
Automated bookkeeping systems can enhance project bidding in construction by providing accurate, real-time financial data and insights. By using this type of solution, teams can analyse their historical project data and expenses to provide precise cost estimates for future bids. Dext Prepare helps construction crews identify patterns and trends from past jobs to better anticipate costs and develop more competitive offers.
When teams have access to correct cost-tracking information, they’re better able to sell their services for the correct price, giving them a leg up on the competition.
Here’s why accurate bookkeeping is the foundation for construction success.
Your Solution to Bookkeeping Automation in Construction
Without automation, bookkeeping in the construction industry can be tricky, leading teams to deal with time-consuming manual data entry and inaccurate documentation. With Dext Prepare, teams can have a strong foundation for their accounting processes, enabling them to focus on what they’re best at: enhancing their community with buildings designed to last.
With Dext Prepare, construction business owners can enjoy:
- Paperwork extraction with 99% accuracy.
- Smooth accounting processes.
- Records kept in a standardised, digital format.
- More time to focus on value-adding work.
Do you want to experience the freedom of bookkeeping automation for your construction business? Start a free trial of Dext Prepare today to get started.