Page 58 - Green Builder July-August 2019 Issue

FIELD NOTES Business tips and
strategies that work.

Getting Going and Going Pro

With Your Payment Strategy

With minimal effort, builders can keep track of money flowing in and out the door.

BY BRENT MEYERS moderate success. Simply adding
’VE WRITTEN ABOUT the a card product or bank-provided
importance of a vendor pay- ACH hasn’t gotten them across
ments strategy for compa- the finish line, because those
nies in today’s business solutions only move money
I climate. But the reality is electronically. They don’t help
it’s twice as imperative for con- reduce the necessary front-
struction companies to imple- end work to get to the point of
ment this process, because the payment. Ironically, introducing
industry’s payment challenges payment types like card and CREDIT: NVOICEPAY
are bigger—and so is the op- ACH solutions on their own can
portunity. Payments are at the actually add more work‡ows and
center of two critical areas of the complexity to the process.
construction business: vendor re- A complicated process is one
lationships and job progress. So, reason construction companies
getting strategic about how you CREDIT: NIC MCPHEE FLICKR are still mostly check-based.
pay can make a big impact. They’re already managing lien
What exactly is a payments releases, progress payments and
strategy? In the check-centered Paper champion? With the transition to a cloud-based payment system, job-cost accounting on top of the
world of the past, it meant money isn’t what it used to be. usual AP process. Adding more
managing ‡oat, capturing early-pay discounts, and/or shifting some work‡ows for electronic payments is the last thing they need.
payments to credit card in order to get rebates. Today, it means using
intelligent automation to get the most leverage from every payment The vendor enablement challenge
you make. The other factor that’s kept businesses from going electronic is the
task of vendor enablement. All you need to pay any vendor by
Beyond replacing checks check is their name and address. But electronic payments require
It starts with eliminating paper checks—but it doesn’t end there. You you to know who will accept a card or ACH—and getting that
have to think strategically about how you’re going to replace them. information is a lot of work.
First, encourage as many vendors as possible to take virtual card Besides that, in order to pay vendors who agree to accept ACH,
payments. Designed speciŒcally for accounts payable (AP), virtual you need to collect, securely store and maintain their banking
cards o’er the convenience and rebates of credit cards, along with information. Most AP departments don’t have the resources to add
an extra level of security. comprehensive, ongoing vendor enablement and data security to
Any vendors who won’t accept credit cards should be signed up their workload.
for ACH payments. After that, only holdouts who absolutely won’t Construction companies face even bigger vendor-enablement
take any form of electronic payment should get a paper check. challenges. Every job is almost like a mini-company, with di’erent
Sounds easy, right? It’s not, for two reasons—work‡ow and vendor owners and di’erent business entities, localized vendors, and an
enablement. ever-changing roster of local and specialty subcontractors. I’ve sold
AP solutions for over a decade, and have never seen an industry with
Workflow changes can mean extra work as much payment complexity as construction.
For years, businesses have tried to eliminate paper checks, with only At the same time, construction also faces low proŒt margins and

56 GREEN BUILDER July/August 2019 www.greenbuildermedia.com

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