In the blog titled “Eight issues that should be top of mind when considering a construction payment management solution,” we discussed the importance of relieving the constant pressure of hiring in accounts payable to keep up with growth and retaining your talented workforce.
An increase in productivity takes care of the first goal, while decreasing fruitless chores (what the Six Sigma methodology rightly calls waste) supports the second. And that means efficiency. An efficient process supports the production of the most value for the least work with the least amount of waste.
As Sarah Murray, vice president at Wood Partners says:
“The only way we could manage this kind of volume of business is with the Oracle Textura automation in place. What tells me we made the right decision is that while our business has grown substantially in the past seven years, the size of our accounts payable department has stayed the same.”
For the construction payment management process, the path to efficiency is through the automation of as many necessary steps as possible and eliminating the unnecessary steps. Let’s look at three key parts of the process where Oracle Textura supports efficiency.
When managing the subcontractor billing process manually, subcontractors often make some type of mistake on their billing documents: wrong formulas, mismatched lien waivers, retention errors, wrong billing templates, or unapproved changes. Billing mistakes take time and effort for the general contractor to review, revise, and resubmit correctly. Then the general contractor re-enters the data into their own accounting systems. The combination of manual data entry and double data entry is a big driver of errors and inefficiency.
Oracle Textura gets rid of both of those problems. Billing automation prevents vendors from making any of these common billing mistakes. In Oracle Textura, subcontractors enter their billing amounts directly into the system. From there, the math is automatically calculated, and all the correct billing forms and waivers are auto-populated for digital signature using DocuSign. Oracle Textura also can prevent vendors from billing for unapproved changes.
Once the billing information is approved in Oracle Textura, ERP integration automatically posts the approved amounts to your accounting application. This short demo shows some of the capabilities for the invoicing and approvals processes
As Jason Humphreys, CEO, Four Peaks Building Group says:
“My project managers can focus on construction and not chasing billing. It’s just been a no-brainer.”
With multiple stakeholders involved on every draw, timely and accurate communication is paramount. The sheer volume of communication that needs to take place often creates bottlenecks that slow the process down and leave individuals in the dark. Oracle Textura remedies this by automating communication and approvals.
Oracle Textura’s workflow and notification engine informs individuals when it is time to perform a task. Whether it’s reviewing an invoice, submitting, or approving a compliance item, or even approving a payment, the solution issues an automated email notification. Oracle Textura also offers a simple task manager that enables users to see what is required from them and the ability to click through to completion.
As Cathy Morrison, construction accounting manager, Digital Realty, says:
“The signature workflow makes it seamless to know when an invoice is ready to be reviewed and to track what signatures are pending. This makes for quicker approvals and faster payments. Gone is all the manual entry into spreadsheets.”
With a manual system, general contractors typically use spreadsheets, shared document folders, and emails. A spreadsheet is a useful tool but not for managing your payment process. A quick Google search reveals scholarly research articles showing that up to 90% of spreadsheets have errors. Then, when information needs to be shared, emailing spreadsheets leaves people wondering if they’re getting the latest information. And see this blog to address security concerns.
Oracle Textura eliminates spreadsheets by bringing project teams together on a single platform, where everything from calculations to compliance to notifications is accurate and automated.
As Alston Construction Chief Financial Officer Adam Nickerson says:
“If we went back to the old manual system, I estimate I would need three project accountants for every one now. As fast as we’re growing, that’s a lot of hiring and related expenses that we can avoid.”
I’ll say it again: An efficient process supports the production of the most value for the least work with the least amount of waste. With Oracle Textura, inefficiency is eliminated, providing people the opportunity to pursue value-added work that is more fulfilling and stands to offer you and your organization a competitive advantage in the marketplace.
Mike Dalforno, Master Principal Solution Consultant, Oracle, contributed to this story.
The Oracle Smart Construction Platform combines our industry-trusted applications with a common data environment and an ecosystem of partners to help owners and delivery teams work together and continuously improve performance. The platform connects teams and data, synchronizes work, and empowers individuals to make informed, proactive decisions. Power performance with proven Oracle Construction and Engineering solutions for scheduling, portfolio management, construction project management, project controls, construction payment management, and more.
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Lucie is an experienced technology marketing professional with a current focus on payment and cost-related products in Oracle's construction and engineering global business unit. At Oracle, her work in product marketing is centered on customer engagement and creating the right content to support our customers.
She has over 20 years experience in engineering, product management, marketing, project management, and sales. She holds a BS in Electrical Engineering and an MBA, from McGill University, Montreal, Canada, and can be found most nights at the dance studio, prepping for her next ballroom competition.