Stop funding construction late payment: Start building your cash flow and simplify Prompt Payment Code compliance
Tight building margins are hard enough without funding late payment. Causeway’s latest report, gives the industry crucial insight into new and emerging trends. According to over 200 top industry professionals and expert analysis, cash flow and late invoice payment are major concerns. Funding late payment, penalty charges, collection fees, bank overdraft fees and factoring charges all add up and drain vital funds out of the construction industry.
Here are three thought-provoking findings:
- 71% state that e-Invoicing could enable easier invoice payment from clients
- 62% agree that e-Invoicing reduces invoice processing errors that delay payment
- 53% believe e-Invoicing improves construction cash flow management
- Construction late payment costs us dear
According to BDO, the global accountancy firm, its experts in real estate and construction discovered that slow or delayed payments add an average of 3% to construction project general costs. This is yet more erosion of the tight margins in our industry.
Furthermore, Construction News reported that 3 in 10 invoices are not paid to the original terms. It seems that with only 40% of responses in Construction’s Digital Front Line report having an integrated technology solution to pay invoices, the answer is simple.
Building your cash flow
It isn’t all doom and gloom for late payment. With a true e-Invoicing solution, invoice data is received, receipted and paid to your business rules when invoices need to be paid – payment on your terms. With automated statement matching and e-Invoicing data at your fingertips, you know what you need to pay and when you need to pay it. Cash flow management is as easy as 1-2-3.
Prompt Payment Code compliance
Thousands of organisations signed up to encourage better payment practices in building, construction and other industries with a pledge to pay 95% of invoices within 60 days. The scheme has begun imposing suspensions on late payment offenders for failing to meet the new standards. This is both publicly embarrassing for firms and has implications for their invoicing process. To date, 35 firms have been suspended or struck off the scheme and 12 of these were in the building and construction sector, or just over 1 in 3 of the offenders.
A true e-Invoicing solution timestamps every digital invoice and automatically rejects invoicing errors back to suppliers with the reasons for rejection – zero error for use in Prompt Payment compliance. Compliance made easy.
A networked supply chain for the construction industry
Our Tradex community is the world’s largest connected supply chain and e-Invoicing network for the construction industry, empowering over 170,000 businesses to better manage their supplier relationships, improve cash flow, and reduce operating costs.
Learn more about our Tradex community here.