Some industries are more challenging to finance than others, and construction and building is one such sector. To learn more about how Constrafor can improve your construction back-office, schedule time with an expert here.Built It Tall and On-time with Construction Financing from Business Factors ConstraforPay also integrates with your existing ERP accounting system, allowing your books to always be up to date! You can also view all your invoices and payments in our simple and interactive dashboards. Start by uploading an invoice, going through the approval process, and then processing payments.
Our product encompasses the full construction invoicing lifecycle and is used by both contractors and subcontractors. With ConstraforPay, you can set up your account and send/receive payments in minutes! Constrafor Payment ProductĬonstrafor’s payment portal allows you to set up your account, authenticate with your bank, and send or receive payments – all under 10 minutes!
As of the date of this article publishing, only ConstraforPayTM goes the extra mile to connect these payments and accounting ledgers to the corresponding projects, and does so without requiring subcontractors and contractors to exchange their routing and account numbers beforehand. This disjointed process can become particularly cumbersome for larger subcontractors and contractors as they work on multiple projects in parallel – and that’s where state-of-the-art A/R and A/P tools have tried to capture these flows.
Therefore, contractors would still have to manually match their invoices to their Accounts Payables and subcontractors would still manually check their bank accounts to verify their Accounts Receivables. But it usually requires upfront coordination for exchanging bank account details.Īlso, ACH transfers are typically disconnected from the accounting tools used in construction. There are various benefits to using ACH payments, such as: speed, security, and cost. Wire transfers are relatively expensive and incur fees on both the sender and receiver thus, the preferred option for most businesses has been to establish ACH payment infrastructure. With the advancement in technology and payment infrastructure, many companies are now opting to use electronic payment methods, such as wire transfers or ACH payments.
Payments for construction invoices have been historically processed using paper checks that process has always encountered issues due to manual errors in writing the checks or having checks be lost in the mail. This means that subcontractors wait an average of approximately 83 days to receive payment for their services, according to a recent study by PWC. Typically, the contract also gives the contractor a duration of 30 days to process the payment after receiving it from the client. Most construction contracts between contractors and their subs are based on a Pay-When-Paid term – meaning that the contractor will pay the subcontractor after receiving payment from the client for the respective invoice. After receiving payment from the client, the contractor will process payment to the subcontractor.Contractor approves the invoice and the workflow moves to the payment process.