The overall financial outlook for construction in 2018 is consistent and stable. Commercial construction is expected to see a 12.4 percent increase in starts, while residential projects will see growth at six to nine percent. While the industry, in general, has seen a resurgence since the recession, individual companies are facing challenges to profitability. Analysts identify poor productivity and profitability, along with technology adoption as two of the top challenges. It’s no coincidence since these go hand-in-hand. How so? Consider the benefits and its effect on productivity of just one piece of technology, a paperless accounts payable system.
1. A paperless AP system saves time by automating your entire workflow. All your important documents are in one secure location ready for you to retrieve in seconds. A system like Sage 100 Contractor or Sage 300 Construction allows you to index, protect and manage files in numerous ways. For example, set up your own sequential routing rules for invoicing based on GL accounts, or organize them by vendor, job or other index value.
2. Increasing productivity is the key to saving money. On average, a company with 100 employees spends 17 hours a week clarifying communication. That translates into an annual cost of $528,443. Clear up miscommunication and stop wasting time resending documents. An automated AP system allows staff easy access to company or project-related documents, based on their access privileges. Staff can easily provide supporting documentation by capturing, uploading or importing any type of document from anywhere. Easily streamline your invoice process. An AP system like Sage allows you to set up an invoice approval dashboard to accurately process and code, and easily view all invoices, supporting documents and reviewer notes.
3. Increase efficiency by automating document distribution and invoice approval processes. Quickly receive all the information you need. An automated system allows you to batch process invoices and the supporting documentation at point of receipt. Instead of circulating documents for review or approval, store and distribute them electronically using predefined rules. Set up return dates, monitor route progress, review the status or recall the document in a few simple steps. Sage allows you to define document types and indexes so that documents can be securely stored on a network drive or device. What if you have supporting files in an external database? Sage also allows you to look up and backfill index values from external databases.
4. Automating your AP system allows you to get payments out faster. Paying on time is the No. 1 factor in building strong supplier relationships. The faster your invoice approval process, the faster payments can be sent out.
5. There’s no need for paper storage when all your files are securely stored. An effective AP system maintains revision history, tracks the audit trail and links all transactions with their supporting documents. Sage uses SAP Crystal Reports to generate valuable data that would take hours or days to retrieve from paper files.
What documents can an electronic AP system manage? All of them, but here’s a shortlist.
- Project management documents including contracts, pictures, and change orders
- HR forms
- Service work orders
- Purchase requisition
- Plans and drawings for estimating take-off
- General ledger adjustment entries
- Daily mail
Competition is fierce in construction, both for quality workers and projects. An automated AP system gives you a competitive edge. Workers that feel more productive are happier, and being happier leads to greater productivity, according to Fortune magazine. It’s a win-win cycle that ultimately yields profits. Forbes reported that the “100 Best Companies to Work For” (those with productive, happy employees) saw their revenues increase an average of 22.2 percent and hired new employees at a rate five times higher than the rest of the nation. Going paperless isn’t the magic ticket for increased profits, but it’s certainly a key tool to streamlining your processes, becoming more productive, cutting costs and getting you on the road to increased revenue. Contact CFO on the go to talk more about paperless options for your construction business.