10 Ways Automation Improves Accounts Payable and Accounts Receivable Operations for Construction Firms

Two areas where considerable advances were achieved in the past decade that tended to consume hundreds of human resource hours before is the automation of bookkeeping processes and payments.

Man at a construction site 

Yet many firms are still stuck in the past, utilizing manual-entry spreadsheets and relying upon technologies that are dated by even the best of standards. There is a myriad of reasons for this but prominent among them tends to be a kind of corporate inertia and truculence to doing things in new ways. Yet automation when it comes to invoices will not only strengthen your firm’s financial position, it will also open up new business opportunities at the same time.

We have distilled ten of the biggest benefits automation in accounts payable and accounts receivable can bring for operations in construction firms using the latest research in this area.

It is our hope that these benefits help you begin the process of reconsidering your current workflow in these areas as well as how you can embrace the new era of automation and the advantages it offers.

Time Efficiency

The reality is that time is money and when you have your staff working on things that could otherwise be automated you are wasting both. Automating your payments system reduces the amount of time your staff has to spend on the mechanics of business and gives you more of a chance to pursue higher-level tasks like analysis and business development. Given that many financial specialists are among some of your highest-paid staff, this conservation of resources is no small advantage in automation’s corner. A cost-benefit analysis should reveal quite quickly just how much money automating your invoice process will bring to your firm in the immediate and future terms.

Improved Accuracy and Reduced Errors

Automation removes the human element from the equation and improves accuracy and efficiency as a result. Errors can add costs and increase the amount of time spent on a task. Avoiding these while also resting easy knowing that your accounts are in good hands is a major driving factor behind why management pursues automation solutions: It removes a great deal of uncertainty from day-to-day operations.

While errors are not impossible, their relative prevalence in automated systems compared to the rate common to even the most skilled employees makes it immediately obvious that automation works and does so consistently.

Optimized Finances

Automation improves financial management and thus optimizes finances for your firm as a whole. This is because automation relies upon real-time information and data whereas other processes are prone to time delays and changing conditions.

Again, automation is about removing uncertainty and part of this process is delivering the most accurate, up-to-date information possible.

Automated Compliance and Monitoring

From account monitoring and security to compliance, automation makes sure that your business is protected from fraud and the misuse of capital as well as preventing you from potentially breaking the law.

Whether it is paying employees on time or taxes or vendors, automated processes will keep your company ahead of the curve as well as deliver you more than advance warning if you are in danger of falling short of your obligations. 

Process Visibility to Necessary Stakeholders

The real-time nature of automation when it comes to invoicing is that it makes the entire payments process visible and transparent to all of the necessary stakeholders. Whereas finance was once a siloed function that only made select data visible to outside departments, automated processes allow for more eyes and input thus decreasing chances of fraud, overpayment, underpayment, and general mismanagement.

Enhanced Vendor Relationships

Vendors like stable client relationships. Stability typically entails paying on time and in full or at least at the agreed-upon amount. Automation makes conforming to these simple requirements easy and somewhat effortless. The result is an improved vendor relationship that could pay dividends down the road from on-time-payment discounts to other special considerations.

Promoting Cross-Department Collaboration

In addition to making the process transparent and shareable among relevant stakeholders, automation encourages collaboration among departments. This could be to come up with novel solutions in a vendor relationship, pursue new cost-cutting efforts, or any combination of plans. Collaboration is often stymied less by a lack of willingness between departments and more often by a paucity of information about what others are doing and how. Not only does automation change the game in this respect, it forces stakeholders to defend their positions with cogent revenue and growth-centric thinking.

Customized Processes

It isn’t like you can’t do a bespoke process manually. You can, and it often takes more time than a standardized route. The longer you are in business, the more “custom” workflows you are likely to acquire. This is just natural, after all, as each vendor relationship has its own unique quirks.

However, the more customized processes you use when it comes to invoicing, the slower and more costly the process of accounts payable and accounts receivable becomes. All of this can be automated and each vendor relationship can get the customized care and concern they want without eating into your bottom line. This preserves the unique relationship while delivering a value-add for your firm.

Enhancing Growth

Systematizing operations is an essential part of a long-term growth strategy. Construction firms that harmonize processes tend to increase revenue, grow profit margins, and develop viable strategies for future expansion. Much of this has to do with the exponential power of automation to increase your business’s productivity and thus enable you to do more with your current capital footprint.

Actionable Data for a Competitive Advantage

Gaining a competitive advantage is about a fusion of operational excellence with actionable and timely data. Knowledge is power and, in business, it can often be the difference between an opportunity and stagnation or even life and death. Automation provides data in real-time as it currently stands thus eliminating any delay and allowing for decisions made to emerge organically from that process. Rather than operate with the fog of war in effect, automation helps make the path forward clearer whatever it may be.