How to track individual project costs and recoup unexpected costs.
Each construction project comes with a pile of paperwork a mile high. One of the biggest challenges? The project costs and parameters will change multiple times before it is complete.
When manually processing invoices, you need to apply changes and delays by hand. Invariably, unexpected costs arise that weren’t included in the original quote. For example, the tiler might accidentally crack the brand-new vanity, which means the replacement cost needs to be on-charged. These changes are labour intensive, time-consuming, and invariably prone to human error. It’s all too easy for an expense to be missed, which impacts the project’s profitability.
Then there is the challenge of chasing down the right person to process the invoice approval. They are generally out on-site, causing unnecessary delays and placing time pressure on the AP team. Since you need to query invoices within seven days under the Security Payments Act, a processing delay can have a significant financial consequence.
These factors lead to your team working long hours under a high amount of stress, which results in increased costs, high attrition rates, and low levels of job satisfaction.
How AP Automation works
Let us take you through the AP Automation process.
The value of AP and AR Automation in the construction industry.
When you automate the processing of vendor invoices, our AP Automation software checks the PO data in your ERP against the invoice. It identifies whether the invoice fits within the allocated funding or is outside of the budget. Any invoice that doesn’t match the PO is sent to the relevant party for authorisation.
Integrating our AR function ensures that the costs are tracked and re-couped for any work that needs to be redone. Maybe it isn’t up to standard or has been damaged by a contractor. A workflow is created that gives the finance team visibility to invoices with a re-billing component and prompts them to raise the required claim.
This way, you can be sure that your costs are tracked, covered and transparent.
Redmap’s accounts payable automation solution has driven down our processing costs by 70%.