Commodore Builders Improves Payment Processes and Subcontractor Relationships

Commodore Builders, a mid-sized general contractor based in the Boston area, fiercely focuses on the needs of their clients. To support an ambitious growth strategy, Commodore sought technology that would support the builders increase in average project value and overall annual project value. The contractor recruited Chief Financial Officer Dave Jolin to help support their growth effort.

Jolin spent most of his career with large organizations, most notably 16 years with Gilbane Building Company, where he used Oracle Textura Payment Management. His background gave him a deep understanding of the nuts and bolts of construction accounting—as well as experience using technology for process improvement, including payments and compliance.

Jolin saw an opportunity to transform Commodore’s back office by reducing risk, improving subcontractor relationships, and increasing customer satisfaction.

He partnered with Commodore Controller Chris Guarino to drive the implementation and adoption of Oracle Textura Payment Management Cloud Service to streamline and automate invoicing, payment and compliance processes, improving efficiency and visibility and mitigating risk.

Oracle’s solution not only helped accomplish Jolin’s vision, but also supported the company’s objectives around increasing their average project value and managing additional subcontractors without expanding their finance team.

On average, Commodore manages 150 jobs per year, ranging from USD $300K to $60M in project value. Overall, the company’s project value has grown from USD $120M to USD $400M over five years, with an average of 15 to 20 subcontractors on each project.

Commodore’s achievements using Oracle Textura Payment Management

Paying subcontractors faster

Commodore’s subcontractors are now receiving payments more quickly. Payment is being received at least three to five days faster due to more expedient approvals and electronic payments.

Some subs are getting paid two to three weeks faster. In the past, a check may have been delayed for five days—even up to five weeks—if there were unresolved compliance issues.

Oracle Textura Payment Management solves this problem by automatically and proactively notifying subcontractors if there are any concerns with their pay application. This enables subcontractors to proactively resolve issues before their payments are impacted.

Improved accuracy

There was about a 25% error rate throughout the subcontractor payment application and invoicing process, demanding Commodore’s administrative and management teams to resolve before the company began using Oracle Textura Payment Management.

Commodore has decreased errors by having a consistent prebuilt format for the subcontractors to fill in, from about 75 to just five fixes on average per month (over a 90% improvement) using the cloud-based construction payment management solution.

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“Being able to easily see the progress of each subcontractor and the status of their compliance documents is incredibly valuable."

-Dave Jolin, Chief Financial Officer, Commodore Builders

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Subcontractors’ timeliness and accuracy has greatly improved, in turn increasing the expediency and accuracy of Commodore billings to the owner.

Boosting efficiency and reducing risk

Commodore currently has 10 project administrators. “Without Oracle Textura Payment Management, the company’s growth would have necessitated adding another one to two full-time equivalents (FTEs)—a 20% increase from their existing staff of 10 to 12,” said Guarino.

Working through cash flow and paying the subcontractors used to take about two-and-a-half working days to run the cash and pay the subcontractors. This process now takes just one full day—a 60% time savings of over 12 hours each week.

In the past, Commodore had one administrator for every two to three projects. Managing the lien waiver and release process alone took an administrator between 30 to 40 hours every month.

That administration step has now been eliminated. The builder can feel assured of the automated exchange of e-signed lien waivers for electronic payments, helping to mitigate a key risk area.

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“Oracle Textura Payment Management has changed our world."

-Dave Jolin, Chief Financial Officer, Commodore Builders

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In addition, Commodore is confident that their subcontractors have the appropriate insurance in place in advance of any work beginning, including no risk of lost certificates, by using the software for  compliance tracking. The builder has also been able to standardize processes. Commodore’s subcontractors require less training and can get up to speed more quickly on each new project.

Better cashflow management

Cashflow is also more controlled and consistent. There are fewer emergencies of same-day payments to avoid work stoppages and schedule delays.

“Emergency payments have gone from being a 10 off to a one off,” said Jolin. “They have a better handle on retention payments. There is complete visibility into when retainage has been paid by owners, enabling Commodore to confidently pay subcontractors.”

Commodore has integrated Oracle Textura Payment Management with their Sage 300 accounting and enterprise resource planning (ERP) system to automatically pass invoicing and payment information between the two tools using Oracle’s TexturaLink. Subcontractors enter their own payables into the system, and invoices flow into Sage 300 upon approval.

 “Using TexturaLink to integrate Oracle Textura Payment Management with Sage 300 has been life changing,” said Guarino.

Up-leveling talent

In another helpful benefit, Commodore has provided significant professional training and education to their staff due to time savings from eliminating manual processing of payments and compliance.

Jolin and Guarino are increasing the construction accounting acumen of the operations team,  which is particularly valuable to those without formal accounting backgrounds. The finance team now performs higher value activities, such as analysis and forecasting, further supporting Commodore’s ability to scale instead of spending countless hours manually managing arduous payment application and lien processes.

“I see the staff’s skills growing before my eyes every day,” said Guarino.

Jolin and Guarino have improved subcontractor relationships, saved time, decreased risk, and improved their finance team’s expertise by implementing the system.

Learn more about how Oracle Textura Payment Management can help your organization.

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

Oracle Construction and Engineering, the global leader in construction management software and project portfolio management solutions, helps you connect your teams, processes, and data across the project and asset lifecycle. Drive efficiency and control in project delivery with proven solutions for project controls, construction scheduling, portfolio management, BIM/CDE, construction payment management, and more.

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