The Benefits of An Integrated Payment Management System in Residential Construction 

Traditionally, residential construction has been one of the least digitized industries, both in the U.S. and globally. As such, Home Builders tend to be overly reliant on manual accounts payable (AP) processes and paper checks. Residential construction payments require collaboration and validation between many stakeholders beyond the back-office. As such, it may take three months or longer for Suppliers and Subcontractors to get paid, which creates serious cash flow problems and accounting issues on both ends. A single unified platform that automates payments and collaboration between Builders and Suppliers provides a simple yet extremely powerful solution to manage payments. Consider your choices — robust payment management software with features that make it as sound as the homes you build or a shaky house of cards built on outdated AP processes! 

Automation/Time Savings

Even with the best back-office staff, relying on manual AP processes can lead to underpaid or overpaid invoices and other substantial financial troubles down the road. Software that provides an automated payment process makes it easy for Builders to check records, track past and present expenses and identify fraudulent charges quicker than any manual process. Automated AP functionality eliminates the need for back-office staff to push papers and answer countless vendor payment inquiries. 

Versatile Payment Options

Knowing payments are readily available rather than waiting days for a check to clear provides Suppliers with improved cash flow and greater peace of mind. Offering Suppliers the ability to choose from payment options they feel most comfortable with is another reason why many Builders have switched to secure and integrated online payment management systems.

Payment and Invoice Visibility

While it’s essential to track the progress of invoices and payments, this is incredibly time-consuming for companies that still rely on paper records. Doing so also makes it cumbersome to readily share important information with Suppliers and Trades. A payment system with insights into every payment enables immediate back-office access with real-time payment status. An integrated system that provides Suppliers with the ability to view payment reports and download them into Excel or PDF via a secure portal is another must-have feature.

Real-Time Data Flow

Payment software should include 24/7 real-time data flow to allow Builders to instantly reconcile payments. This feature improves cash flow visibility and working capital management, while also reducing the potential risk of fraudulent payouts.

Reduced Fraud/Increased Security

The Association for Financial Professionals 2022 Payments Cost Benchmarking Survey found that 73% of organizations were transitioning B2B payments from checks to electronic payments. Reduced cost and improved efficiency were the number one reasons, however, two-thirds of respondents also cited fraud prevention as a motivator. According to the U.S. Postal Service inspector general, complaints about mail theft increased by 161% from March 2020 to February 2021. The crime wave is being fueled by a thriving online community that offers stolen checks for sale. Recent data from David Maimon, a sociology professor at Georgia State University that investigates stolen checks, identity thefts and bank account breaches, showed a threefold increase in the online market for stolen checks in the last six months. Sending payments via a secure portal is a great way to combat this growing problem.

Explore More Benefits of An Integrated Payment Management System With Hyphen Solutions

Hyphen Wallet provides Builders with one central location to pay Suppliers, while giving Suppliers the choice of how they want to be paid. Hyphen Wallet combines payment methods, subsidiaries and regions using 24/7 real-time payment and data integration. Auto reconciliation ensures a fast, accurate financial close cycle while improving cash flow visibility and working capital management. Automation makes it easy for Builders to check records, track past and present expenses and identify fraudulent charges. With accounts payable automation, users can reduce invoice processing time by 80% and invoice errors by 23%, thereby increasing Supplier satisfaction.

Get in touch with a Hyphen expert to learn more about how Hyphen Wallet benefits Builders, Suppliers, Contractors and Trades or schedule a demo.

Stay Tuned To Read More About How Builders and Suppliers Can Effectively Use A Payment Management Software Across Networks

How Builders and Suppliers Can Effectively Use a Payment Management Software Across Networks delves into additional benefits of an integrative and collaborative payment management solution for Builders and Suppliers. In addition to simplifying sending and receiving payments, the right solution helps forge longer lasting partnerships with Suppliers by providing the assurance they will be paid securely and on time. 

In case you missed the first blog in this series, we suggest reading it to learn more about when it’s important to implement a payment management system in residential construction.