Accounting Industry

Modern Payment Platforms For Construction

Modern payment platforms have revolutionised the way payments are processed and managed in various industries, including the construction sector. 

The advent of cloud-based systems and API connectivity means that it is now much more sensible to use a connected suite of best-in-class apps to carry out tasks, rather than rely on a locally hosted system trying to do too many things – or worse, rely on manual systems.

With the amount of options out there, it can be hard to know which software you actually need, and it can be difficult to find industry-specific advice. We have collated some of the most important use cases for modern payment platforms within construction. We’re covering:

Efficient Payroll Management
Supplier and Vendor Payments
Subcontractor Payments
Real-Time Expense Tracking
Mobile Payments in the Field
Compliance and Auditing
Progress Payments and Milestone Tracking
Integration with Accounting Systems
Cloud-based payment platforms - making construction finance more efficient

Efficient Payroll Management

Construction companies often employ a large number of workers, both permanent and temporary. Typically, some will be paid an hourly/daily rate, some will be paid a salary, some will be paid weekly and some monthly.

All of this means that the payroll process can be long and complex. Because of that complexity, it is vital to find the opportunities for increased efficiency and take advantage of all these. Every part of the process that has to be done manually will add unnecessary time and complexity to the process. Automating payments will save the finance team time, and also minimise the risk of introducing manual errors.

A modern payment platform can help to streamline the payroll process by automating faster payments to workers using API integration with your payroll system. Simply submit your RTI and then click ‘pay’ to send your payments. No need to input and no need to check again.

This reduces administrative overhead and ensures accurate and timely payments.

Supplier and Vendor Payments

Complex construction projects require materials and services from multiple suppliers and vendors, and any delays in delivery to site will introduce unnecessary delays. And these delays are not only annoying, but will very quickly start having a negative impact on the bottom line.

But what if they delay is due to a payment delay on your end, or you’re over your credit limit? If this isn’t picked up immediately, getting the payment through can take several days, extending the delay unnecessarily.

Using a centralised payment platform will allow you to identify potential issues before they arise and allow construction companies to easily manage and pay invoices, track payment statuses, and maintain transparent records of all transactions. 

This helps in streamlining financial operations and improving relationships with suppliers and vendors.

Subcontractor Payments

Subcontractors are the lifeblood of the construction industry, and there can’t be many construction projects that don’t involve subcontractors performing both routine and specialised tasks.

Many subcontractors are paid weekly, making it a time-consuming process. You must also ensure you stay compliant with regulation like CIS and other additional payments or subtractions.

A payment platform can facilitate secure and timely payments to subcontractors, ensuring proper documentation and compliance with legal requirements.

It can also enable easy tracking of subcontractor invoices and expenses, providing transparency and simplifying financial reconciliation.

Real-Time Expense Tracking

Construction projects involve a wide variety of expenses, such as equipment rentals, fuel costs, and employee reimbursements.

A payment platform with expense tracking capabilities allows construction companies to capture expenses in real-time, categorise them appropriately, and generate comprehensive reports. Combining this with using pre-loadable corporate cards ensures that you have real-time oversight of your spend.

This enhances financial visibility and helps in making informed decisions about project budgets and cost control.

Mobile Payments in the Field

Construction sites often require on-the-spot payments, such as for material deliveries or emergency repairs. In some cases, payment will need to be made before delivery is attempted such as where the contractor is hiring skips or buying from non-account merchants.

Modern payment platforms with mobile apps capabilities enable project managers to easily make payments anywhere, anytime directly from their mobile devices, reducing the need for cash transactions and improving efficiency.

Compliance and Auditing

Construction companies face strict compliance regulations and often undergo audits to ensure adherence to industry standards.

In some cases, this will be for the company’s annual audit where a clear trail needs to be evidenced of the payment process.

In others, project managers may need to report to clients or to lead contractors on spend.

A payment platform can provide robust reporting and documentation features, making it easier to track and validate payments. This simplifies the auditing process and ensures compliance with regulations, mitigating financial risks for construction companies.

Progress Payments and Milestone Tracking

Construction projects typically involve progressive payments based on project milestones. 

A payment platform can automate the tracking and release of progress payments, ensuring that payments are made accurately and in line with project timelines and completion benchmarks. 

For lead contractors, this feature enhances transparency, reduces disputes, and improves cash flow management for construction firms.

Integration with Accounting Systems

Modern payment platforms can seamlessly integrate with existing accounting systems used by construction companies. 

This integration enables the automatic synchronisation of payment data, simplifying financial reconciliation and eliminating manual data entry errors. 

The time saving through integration can be massive with a reduction in manual entry, checking and re-checking and error identification.

A modern payment app will also provide a holistic view of financial transactions and enhance overall financial management.

Integrated systems also reduce the risks of manual entry errors, incorrect payment allocation and fraud.

Cloud-based payment platforms - making construction finance more efficient

These use cases demonstrate how cloud-based payment platforms like Caxton can streamline financial processes, enhance efficiency, improve transparency, and mitigate risks in the construction industry.

Finding efficiencies and opportunities for automation frees up your time to work on more complex tasks that require your full attention. And because Caxton is simple to set up and requires little in the way of training, you can start to see the benefits almost immediately.

By leveraging the features and capabilities of our platforms, construction companies can focus on their core activities and drive better project outcomes.

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If you're looking for more information on finance and accounting then check out our Accounting Industry Articles or our Accounting Hub. If you're interested in Caxton's Expense Management Platform then check out our Expenses page.

Caxton Payments

Caxton Payments is an alternative to traditional banks, established over 20 years, we help businesses make faster payments more reliably. We offer streamlined processes, automation through API and a collaborative solution to complex payment issues all from a single platform. Our payment capability extends from business expense management, to payroll payments, supplier payments, and currency risk management. We also offer personal prepaid travel cards and international money transfer