Construction is not new to the idea of changing net 30 (or more) payments into smaller faster, smaller, and more real time payments.
Many different methods can be used to speed up payments for operations including factoring, front loading the SOV, percentage based or discounts for faster payouts; but as the industry’s margins remain thin, even these schedules can limit small businesses and inhibit how companies maintain cashflow.
92% of construction companies say they don’t always get paid on time and it is not uncommon to wait 60+ days for payment for work completed; studies show that late payments are a top factor in construction schedule delays as well as disputes.
Many stakeholders are opting towards flexible payment schedules. Using technology tools and automation to handle payments allow for a myriad of benefits to construction companies and the projects they work on. Transparency and accountability are things DigiBuild strives for in our industry; increased transparency and faster progress payments provided as work is completed allows for more flexibility for all stakeholders from the top of the project to the bottom.
Transparency in a project can alleviate risk from stakeholder to stakeholder and thus relieve the tension brought on by the constant mantra of protection that takes place in the current system. Much research has been done to demonstrate the effectiveness a mutually beneficial contract can have for an entire project team and the same can be said with the monetary risk and reward of a team.
Faster payments have been shown to be an effective incentive to encourage contractors to meet project schedules and avoid costly disputes. DigiBuild’s automation helps to achieve faster payments and more transparency, a win for all stakeholders and the project itself.
The automation of payments and transparency of responsibilities between parties is just another way DigiBuild can not only keep your project on track and on budget, but even save labor and administrative costs as well as mitigate risks before they arise.