How Old Construction Payment Technology Creates Challenges for Accounting Procedures
When construction payment technology was first introduced into the industry a few years back, it was revolutionary.
Many companies adopted the earliest forms of the new tech. Others have yet to jump on the digital tools bandwagon.
After all, the construction industry is notoriously slow at adopting new technology. Fewer than 23% of construction firms have any digital strategy at all [KPMG]. But of the firms that took that first step into the world of construction software, many of them stopped there. Using old tech to process payments and track financials is much like attempting to use a floppy disk in a world that’s moved well beyond them.
Here’s a look at some of the challenges old tech can create in a construction company’s accounting procedures.
No Trust in the Data
Financial management plays a major role in running a construction company. Construction finance is complex and highly involved, and there’s little room for error. Even a small error can have catastrophic consequences.
That’s why it’s so important for accountants and others involved in project management to be able to trust the financial data they’re being given. And old construction payment technology doesn’t exactly exude trustworthiness.
Older systems weren’t designed to keep up with the pace of work today. So in order to keep them operating, users often need to enlist the help of other applications and systems to help it along. This means transferring data from one system to another, or even across multiple applications. And the more that data is moved around, the higher the likelihood of errors.
The amount of manual data entry that old tech requires is laughable. Who has time to sit at a desk and enter numbers, when new technology exists to completely automate those processes? And the longer that data entry is delayed, the longer all other financial processes will take.
Inventory. Construction loan draws. Paychecks for suppliers and subcontractors. Time-consuming data entry due to the refusal to move on from old tech results in payment delays and slowed accounting procedures.
Lack of Real-Time Insight
How can you know what payments have and haven’t been made if the data hasn’t been entered in real-time? Old systems don’t allow for current, real-time insight into data. And that makes it really difficult to make decisions moving forward.
Construction work moves fast, and contractors need to be able to look at the data and use it to make informed decisions right away. New construction payment technology means you can do that without having to remember to allow for that check that was sent but hasn’t come out of the bank yet.
CoFi Is Here
If you’re ready to update the construction payment technology your business uses, CoFi is here to help. Our innovative technology eases the pains of construction lending through automating draw, streamlining processes, eliminating manual data entry, opening the lines of communication, and increasing collaboration. See how CoFi can help your business. Schedule your personalized demo today!