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Insights and best practices for construction management technology and project delivery

How a Mid-Sized General Contractor Improved Payment and Compliance Processes to Support Growth

Janet Poses
Sr. Marketing Manager

Blach Construction Company understands that real digital transformation encompasses not just the jobsite, but also the back office.

Founded in 1970, the San Jose, California-based company serves the San Francisco Bay Area and Monterey Bay communities and focuses on education, institutional, and mixed-use projects. A progressive firm, Blach has created an environment that empowers employees with information, tools, and technology to do great work and build meaningful careers.

Blach has continually been recognized by its employees as a “Best Place to Work,” as reported by both the Silicon Valley Business Journal and San Francisco Business Times, earning the #1 spot in the mid-size category as recently as 2019. Additionally,  the builder’s ambitious expansion landed them a recurring spot in the ENR Top 400 General US Contractors.

Improving back-office payment and compliance management processes

In 2011, Blach Construction set out to improve their back-office payment and compliance management processes. The builder had already been using electronic workflows for invoice routing and review before implementing Oracle Textura Payment Management to boost efficiency in subcontractor billing processes and streamline and automate compliance and lien waiver management.

The Oracle solution facilitates the company’s digital invoicing, invoice approvals, exchange of e-signed lien waivers, and electronic payments to subcontractors. The organization also integrated Oracle Textura Payment Management with their enterprise resource planning (ERP) system, increasing productivity and reducing errors and risk. The entire invoicing and associated approval process is automated—all relevant parties now know the status of pending invoices in the system.

Streamlining lien waiver management and subcontractor invoice processing

Upon joining the company in 2009, Laurie Rosenga, senior accounting manager, was tasked with finding a tool to streamline lien waiver management and subcontractor invoice processing and found Oracle Textura Payment Management during her market evaluation.

“I have always been very impressed with Blach leadership being so tech-focused,” said Rosenga.

At the time, the Oracle solution integrated with Timberline (now Sage 300), which was a key selling point for Rosenga. Since then, the company has moved to a new system, CMiC, that has also been integrated with Oracle Textura Payment Management.

“The initial roll out, working with the Oracle Textura Payment Management team, was a relatively seamless experience,” said Rosenga. Initially, subcontractor onboarding took some time, but as of today, many of the organization’s new subcontractors are already using the tool.

Three ways Blach Construction optimizes their payment and compliance processes

1)    Standardization

One key to efficiency is consistency. Blach Construction has standardized on the Oracle system across all their projects and subcontractors. For example, every contract includes the requirement for all subcontractor billings to be submitted through Oracle Textura Payment Management. This ensures a consistent approach to managing invoices, lien releases, and certain compliance issues.

2)    Expansion

Blach is always looking for ways to streamline processes and expand the use of their existing tools. The company uses the tool to track two types of affidavits subcontractors need at the end of a job to satisfy California laws created for public school district and private work. “Oracle Textura Payment Management definitely facilitates things,” said Rosenga.

3)    Integration

Any business with a focus on project work runs into the challenge of corporate and project systems that that don’t communicate with each other. This lack of integration exposes organizations to risk due to siloed information and error-prone double entry. Blach Construction selected their solutions with robust integration in mind because they recognized the importance of using compatible tools.

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“Adopting new software is not an easy process. However, during our conversion from Timberline (Sage 300) to CMiC, the Oracle Textura Payment Management team was with us every step of the way.”

-Laurie Rosenga, Senior Accounting Manager, Blach Construction

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Scalable processes to support growth

Blach Construction’s project value has increased significantly over the past decade, yet the accounting team has remained at the same staffing level. Today, the firm may have dozens of projects under construction at any given time.

Ordinarily, it could take two or three people to manage subcontractor invoices of this scale. Now, a singular employee can effectively manage all subcontractor invoices across all active projects electronically thanks to the tool's automation.

There is no paper routing or tracking to contend with. Additionally, subcontractors receive payment an average of five to seven days faster than they did before.  

Better change order processing

When it comes to change orders, subcontractors can bill against them and receive payment within the window of a current open draw, because change orders can be uploaded instantaneously to the Oracle system. This has eliminated subcontractors’ invoicing against change orders that are not yet issued—a  practice that often took several hours each month to resolve. As a result, the team witnessed time savings of at least 50% and overall increased efficiencies.  

Improved job costing and forecasting

Subcontractor invoice and payment information is available in real time due to the integration between Oracle Textura Payment Management and Blach’s ERP system, CMiC. The firm can easily review invoice detail in their ERP system without having to navigate between systems.

This further ensures that all invoice and payment information is current for job costing and forecasting purposes.

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“The automation enabled through Oracle Textura Payment Management has been a huge time saver.”

-Laurie Rosenga, Senior Accounting Manager, Blach Construction

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Decreased risk

The tool also has a feature that enables Blach project teams to easily place holds on final payments. In the past, payment holds were conducted by email or phone, a practice that had increased risk of releasing a final payment before all deliverables were received.

Now, not only is the payment hold in the system for the accounting department to see, but the reason(s) for the hold are also included and automatically communicated to the subcontractor.

Improved lien waiver management

Prior to using Oracle Textura Payment Management, Blach Construction sent the unconditional lien release with all payments, a time consuming and manual process. Now, the lien release is signed in the Oracle system and is ready for automatic release to the general contractor upon payment, resulting in over a 50% time savings per month across all their projects.

Learn more about Oracle Textura Payment Management.

Watch our webcast to learn how Oracle Textura Payment Management Cloud Service drives efficiency, enhances visibility, and increases control to manage risk.

Explore how you can deliver project success with Oracle Construction and Engineering.

 

 

 

 

 

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