How automation is transforming the accounts receivable process in the construction industry.
Construction company financials are challenging. Invoices are complex. Payment cycles are long. Business partners demand a wide range of payment types. And juggling myriad credit approvals and contract terms is par for the course.
The stakes are especially high in a business where time is money. Payment delays come with costly repercussions, and managing accounts receivable (AR) manually only adds to the risk.
Enter CommercePayments® Integrated Receivables, a comprehensive AR solution that streamlines the entire order-to-cash cycle — from credit assessments to debt collections. It includes tools to help optimize cash flow, minimize manual errors, and free up your team to focus on more strategic tasks.
“At the end of the day, your staff can only do so many things,” said Commerce Bank Senior Product Manager Kevin McWilliams. “Automating can right-size the job so that people have enough time in the day to accomplish everything that they’re trying to do. We’re able to get the most important task to the top of your queue rather than your team trying to boil the ocean of everything that needs to be done.”
From manual frustration to automated efficiency.
CommercePayments® Integrated Receivables is more than just another batch of software — it’s a system that completely reimagines how AR works. The system includes several software solutions, each targeting one pain point in the AR process: credit management, billing and invoicing, cash application and collections. This frees up staff time for higher-value work, such as addressing exceptions and setting and implementing strategy.
Collections Cloud is one of these solutions that brings exceptional value to construction companies. Slow payments are a significant issue in this industry, with some contractors increasing their bids by up to 10% to counteract payment delays. By replacing a manual collection process with an automated system that uses AI to identify which accounts to call and when to call them, you can reduce days payable outstanding (DPO) and minimize write-offs.
“I spoke with a customer who explained they had a binder of customers, and they would go A to Z calling on them for collections,” McWilliams said. “That’s not efficient. We were able to give them a great user interface to figure out the highest-value collection call they could make.”
Deductions Cloud is another product that also makes a big impact on construction company AR teams. It simplifies the deduction process by identifying short pays and deductions within the data in your enterprise resource planning system and matching it to backup documentation. This makes it easier to find invalid deductions. The system also serves as a workflow management tool, streamlining communication with customers throughout the dispute resolution process.
“We’ve heard some customers say, ‘We have $1 million-plus in deductions, and we don’t know which of those are valid, where we’ve agreed on a specific discount to their payment, and which are invalid,’” McWilliams said. “By using technology, we can quickly identify deductions that are likely to be invalid so the team can quickly review and address them without wasting time wading through valid deductions.”
With additional credit, collections and cash application solutions, CommercePayments® Integrated Receivables helps construction companies make the most of their AR teams.
Empowering the human connection.
AR employees are also hungry for change.
By automating routine tasks, CommercePayments® Integrated Receivables reduces the time — and stress — traditionally associated with month-end and other labor-intensive times of the year. Gone is the tedious scramble of pulling information from multiple systems, matching payments with invoices and tracking down data to address inconsistencies. Instead, the AR team can focus on work that advances the company’s mission and strategy.
That’s great news for those tasked with attracting and retaining finance team members. Demand for finance and accounting department employees remains strong, and employees are looking for roles where they can make an impact.
“Companies are trying to recruit the next wave of AR specialists, and those people aren’t looking for jobs that require them to do super monotonous tasks,” McWilliams said. “They want to see automation.”
A simpler, smarter future.
Onboarding CommercePayments® Integrated Receivables is straightforward, with most implementations taking just 12 to 16 weeks. This includes integrating the system with the business’s existing enterprise resource planning system and testing and training employees. Once complete, your AR team will have everything they need for long-term success.
From automated credit applications to faster collections, it’s time to transform how your team thinks about AR. The future of construction finance is here.
CommercePayments® solutions are provided by Commerce Bank.