This article is from our friends at Dialpad.
Like most modern industries, the construction industry is adapting to new technologies. Over the last 20 years, tech has revolutionized every aspect of business. This ranges from the use of email to the integration of sales enablement software. Technology is everywhere, and this rate of change is only set to increase.
This article will focus on the latest advancement in the construction industry: payment apps. But first, what are they, and how can they help your business?
What Are Payment Applications?
The process of accepting and receiving payment can be long winded and tedious. Forms need to be compiled, exchanged, and signed. On top of this, you’ll have large amounts of paperwork to cover legalities. Although you can find resources to speed up processes, such as an accounting services proposal template, this will all take up time.
To add insult to injury, payment can take up to three months to arrive. In addition, 40% of contractors say they don’t receive full payments for every job. This can be devastating for a company. Especially if there are business or personal loans you have to pay back.
Until recently, there was no way of avoiding paperwork. Although unwanted, it was necessary. But the arrival of payment applications has changed all of this. In one step, an app can handle all aspects of payment. This includes:
- Requesting payments.
- Sending necessary paperwork.
- Providing evidence of work.
As well as automating the payment process, apps offer features to make the life of a constructor easier. Below are some examples of these additional features:
- The total earned to date.
- The amount of money owed.
- The value of work that has been completed.
- The value of materials that are stored on-site.
There are also other useful apps and tools available to make life easier for constructors beyond payment apps, such as landscaping estimate software.
Most payment apps are free, and instead of charging the user, they take a small cut of earnings.
What You Should Look For In a Payment App
If you are reading this document, you’re probably considering switching to a payment application. But before doing so, you need to make sure that an app has the features that you need. Here are some crucial functions to look for.
The Right Documentation
Having the right documentation is crucial when dealing with payments. Without detailed and thorough documentation you could be affected by back charges. Your payment application should include all of the relevant documents.
This should consist of some of the following:
As a contractor, you will need to source a variety of different materials for each job. The continuation sheet specifies the costs of these materials.
Whenever there is an alteration to the original working agreement, a change order is needed. Change orders are a crucial part of ensuring that payments are received. The longer they take to process, the longer it will take to receive money.
Schedule of Values
A schedule of values is a comprehensive list of every work item involved in a project. Each item listed should also include a price. The schedule allows project managers to track the overall progress of a project.
Sometimes a dispute can be handled with a simple phone call (or even a video call if you’re using a small business phone service). At other times, however, more concrete evidence is needed.
There are many reasons why you might need photographic records. Photographs can act as progress updates for clients and project managers. A photo can also be used as evidence in the case of any litigation. Below are some instances in which photographic evidence can be useful:
- An injury occurs on the worksite, causing a dispute over the use of signage. Photographic evidence can help you to prove that necessary signage was in place.
- Long after a job is finished, a client complains about incorrect materials being used, which have caused damage. In this instance, you may no longer have receipts to confirm that the correct materials were used. But with records of photographic evidence, you can demonstrate the use of the correct material.
- Damage occurs during construction, but litigation begins after repairs are made. Photos can be used to ascertain the cause of any damage.
Above are just some of the reasons why photographic evidence is essential. That’s why it’s important that your chosen payment application allows you to upload images. It should be simple to archive photographs for future ease of access. This type of feature is also extremely important to apps for real estate agents.
Payroll and Wage Reports
As a construction company, you will not only have to adhere to federal law but also state and local legislation. There will be a plethora of labor and payroll laws that you need to be aware of. A simple payroll mistake can have big consequences for you and your company.
Payroll reports are essential for keeping you on the right side of the law. It’s important that both payroll and wage reports are included in your payment application.
There are multiple reasons payroll and wage reports can be useful, including:
- They help you to better prepare for an IRS audit, a worker’s compensation claim, or to fill out government forms.
- They can ensure that you maintain a cash flow. For example, you can monitor whether you’re underpaying or overpaying any employees.
- With payroll automation, you can do away with admin tasks such as compiling payroll reports or processing salary payments.
Find the Right Solution
As the construction industry turns more to technology, payment applications are the next step. As discussed here, there are many reasons why an app can be a useful solution. You can do away with tedious paperwork, and reduce the lengthy process of receiving payment.
But to gain all these benefits you need the right payment app. This article has looked at some of the essential features. With these in mind, start looking for a solution that supports your business.
About the Author
Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration with features like sales automation in Dialpad. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Grace has written for domains such as Startups Magazine and MultiBriefs.