Cash flow is the lubricant which keeps projects running smoothly in the construction industry. Construction projects, by their nature, tend to have uneven progress toward completion. This creates a challenging environment for you to keep cash flowing; so that you can finance your operations and complete your part of a project on time. Here are the top tools for increasing your cash flow.
Use an automated accounts receivable system with invoice template capability. Why create a new invoice each time you bill the same customer? With an invoice template you can reduce the amount of time spent invoicing, and very importantly eliminate errors and missing information. Error free invoices are paid quicker, increasing cash flow.
An invoice is not complete if it is missing documents, which need to be attached. Work flow capability in an automated accounts receivable system can make it easy for you to attach electronic copies of all required documents.
Work flow also makes it easier for you to administer the mechanic’s lien process, which is document and date driven. Invoices covered by a mechanic’s lien are more likely to be paid before invoices that are not protected.
Prompt processing of change orders helps to ensure that your invoices are not held up for payment. Work flow can expedite the documents needed to update contract changes.
Offering online payment to your customers can expedite payment and increase cash flow. A hyper-link on your invoice, linked to a secure payment portal, makes it easy for your customer to pay by credit card or ACH transfer.
The opportunity to take a cash discount for early payment may prompt your customer to pay before the invoice due date. Cash discount terms can be conveniently added to an invoice template.
Disputes are a major reason for delays in paying construction invoices. An automated accounts receivable system with online note capability makes it much easier for you to follow-up on the resolution of disputes and other issues causing payment delays. Disputes need to be resolved promptly to avoid disruption in your cash flow.
Accounts receivable are easier to manage and collected faster, if customers with past due invoices, are automatically sent emails with invoice copies attached. This feature of an automated accounts receivable system makes your job easier and helps to increase cash flow.
If you do not have automated accounts receivable, you should give serious consideration to upgrading so you can take full advantage of these tools for increasing cash flow.
Automated accounts receivable software, which includes the capability to take advantage of tools for increasing cash flow, is available from Lockstep Collect, a leader in the field with a track record of assisting construction firms with billing, invoicing and accounts receivable management. If your firm would like to learn more about how you can automate your billing, invoicing and accounts receivable management to increase cash flow, please contact Lockstep Collect at www.lockstep.io.