Unfortunately, all construction subcontractors receive a vendor invoice in a back office that does not match the purchase order or associated bill of materials. These frequent exceptions typically start a chaotic process called the paper chase.
In a typical contractor’s office, these invoices and some others from time to time need someone other than the accounting team to give their approval and processed for payment. The manual process involves many steps, including walking the doc, emails to another office, the project manager review, or purchasing manager’s desk before finally being approved and entered in the accounting system for payment.
This manual system has created several problems for years. Misplaced invoice. The fact that the invoice is sitting on a desk and has not been entered into the accounting and job-costing system make it very difficult to get accurate and timely job-cost and financial reports, crucial to successfully running a construction company.
Imagine a $35,000 invoice being excluded from the monthly financial and job costing reports because it was misplaced on someone’s desk. That job that appeared profitable is suddenly in the red when next month the invoice finally reaches accounting. The effects, time, costs that this manual process has on subcontractors can be quite substantial.
GC’s and Owners start to question the accuracy of your job-costing and financial reports if all of the invoices are missed. Project managers also spend unproductive time trying to track down and approve these invoices instead of using that time to manage their jobs better. Project managers need to focus on managing resources, increasing productivity and profitability than tracking and chasing down pos, invoices, and billables to approve them. This misallocation of energy is quite costly for any project.
Solutions That Work
The manual processes that support purchasing and material management are much simpler to enhance for construction subcontractors than most think. StructShare’s mission is to enable subcontractors to transition into efficient material purchasing and management easily. StructShare replaces the error-prone and manual-based purchasing workflows with a fully digital solution designed specifically for trade contractors. Connecting the field, back-office and suppliers is what they do.
For example, the StructShare platform and field-first mobile app enable a single workflow between the back office, field, and suppliers, efficiently managing critical invoices in an expedited status workflow and eliminates the processing delays that can hinder cash flow.
When a Field supervisor or other user has invoices or materials that are crucial for pushing the project forward receive automatic messages updating them on the status – in review, rejected, and approved for delivery and when. That back-office staff reviews the invoice, PO, and billing document in a SINGLE VIEW to approve or rejects it knowing if its within budget or out of scope.
The purchasing manager (PM), whose approval is required, will then be notified that invoices are awaiting their approval. Searching through stacks of paper or spreadsheets or different systems is eliminated. The PM can review the purchase orders, invoices, and the bill of materials on-screen with the click of a mouse and approve or reject the purchase.
A paperless system allows contractors to submit field requests from approved supplier lists, which automates invoices, checks, and billings and keeps them in one place. In this scenario, the Field Supervisor will be updated automatically on the status of deliveries and can confirm materials and quantities. If anything does not match, notifications to all stakeholders keeps everyone on the same page.
Digital purchasing and material management in one cloud-based platform and mobile application allows contractors to:
- Eliminate the messy paper trail and tracking down lost documents;
- More accurately prepare billings in less time;
- Project managers save time of chasing down invoices or pos;
- 100% field mobile app adoption; it’s easy to use
- Significantly speeds up workflow (Ordering, Approval, Delivery);
- All documents are in one place;
- Automated review, matching, and approvals of Pos, Invoices, and bill of materials
- Ordering materials from suppliers is electronic including shipping, handling, delivery status and synced with invoices and POs;
- Keeps Field, Back-Office, and Suppliers on the same page;
- Easy integration with popular project management and accounting systems.
Construction subcontractors can sign up and start using StructShare the same day, new to the subcontractor and self-performing general contractor marketplace. This electronic process will save contractors a considerable amount of time and make them more efficient. Still, the improved accuracy of their job and financial reports will improve job management and increase profits.