In the blog post titled “Eight issues that should be top of mind when considering a construction payment management solution,” we discussed that sometimes there can be friction in relationships between project stakeholders. Something as simple as an overlooked email, a forgotten insurance certificate, or a mistake on a lien waiver can grow into a problem if communication is lacking. If that miscommunication results in a delay with the payment, it can lead at the least to mistrust, disputes, and sometimes litigation. No one wants that.
With everyone using a single platform, owners, general contractors, and subcontractors have full visibility into compliance and payment status and can identify and fix potential issues before they become problems. Everyone is always on the same page with no discrepancies between subcontractors and general contractors in terms of billing, approvals, compliance, and payments.
Adam Nickerson, chief financial officer at Alston Construction, says:
“I’ve never had a subcontractor say it (using Oracle Textura) wasn’t well worth it. Once they see how much easier it is for them to complete the pay application, and how fast they get paid, they’re great with it. Plus, when they’re bidding on a project and they’ve got a GC that pays slow and a GC that pays fast, the one that pays fast gets a better number and a better service.”
Let’s look at the key capabilities of Oracle Textura, a construction payment management application, that supports communication, collaboration, and visibility so you can keep the payments process smooth and fast while attracting and keeping the best trade partners.
In a manual payment process, multiple channels are used for communication: email, phone, text, and in-person conversations on the jobsite. Notes and reminders are created and must be tracked across different systems. On a fast-paced job, something can slip. Imagine that a pay application has a missing lien waiver, so the contractor sends the sub an email asking for the lien waiver and saying the payment will be held until the issue is resolved. The sub misses the email. They’re expecting a payment today, and need to make payroll, but the payment doesn’t come. The issue gets resolved and the payment is made, but later than expected.
Prevent such problems with an automated process. With Oracle Textura Payment Management, specific capabilities allow for collaboration and communication on a single platform. Automated notifications on system and off (via email) leverage triggers for compliance requirements and payment holds, which minimizes manual back-office work to prevent missed due dates or deliverables.
Figure 1 shows an on-system notification of a payment hold, while Figure 2 shows embedded compliance tasks right in the payment application workflow, so no task is forgotten. These are just two examples of the many ways Oracle Textura ensures that nothing gets missed.
AMC Accounting Manager Christina Payne says:
“Compared to manually managing payments and compliance, or using other systems we are required to use, I prefer Oracle Textura Payment Management because we can easily track when payment applications are accepted. If there are issues, we get timely notifications to revise them, so we can proactively resolve issues before payment is delayed.”
Figure 1: On-system notification of a payment hold
Figure 2: Notification of compliance tasks embedded in pay application workflow
Much like a well-executed football play that gets the ball in the end zone, an efficient payment process is strongly correlated to the success of the collaboration between all stakeholders. Oracle Textura has built-in capabilities to ensure general contractor and subcontractor work together throughout the project’s lifecycle, from establishing the schedule of values and contract setup, through every billing period to close out. Figures 3 and 4 show examples of managing subcontracts, schedules of value, and task lists.
Figure 3: Creating and accepting contract and schedules of value
Figure 4: Task lists: Single location to view all your assigned tasks across multiple projects
Clear status indicators identify “the ball is in your court” action, keeping workflows moving forward. When the sub takes an action, the GC sees it right away and performs the next step.
The automation of the process that supports communication and collaboration means the system handles the mass of mundane actions that can so easily slip, freeing you to focus on more value-added work to keep the project progressing.
Moss Operations Controller Lewis B. Newton II says:
“The accounting team has transformed from being processors to analyzers; it elevated their position. They can focus more on aligning themselves with the PMs and being more involved with the budgetary controls of the project.”
Imagine yourself in this scenario:
You (project accountant) receive an invoice from a sub in an email. You then email the invoice to a project manager (PM), who approves and emails it to their project engineer (PE), only for the PE to note that the materials stored on-site haven’t arrived. The PE sends the invoice back to the PM with a note, who then sends it back to you to then send it back to the sub. The sub’s admin gets it and must track down their foreman. The foreman can’t get to it for another day. Finally, she makes the change, fills out a new invoice, then signs and sends it to the PE. The PE sends it back to you to start the approval process. Once finally approved, you’ve then got to manually enter it into the accounting system. One simple rejection of stored materials has taken days to get resubmitted, approved, and into the accounting system.
Instead, once automated with Oracle Textura, the system clearly identifies which compliance documents need to be provided for the project and for each billing period. The invoice process (Figure 5) creates, captures, and stores many of these documents on the sub’s behalf including lien waivers with correct numbers and format, at the right moment during the draw period, with automated notifications about impending requirements or missing documents.
Figure 5: Compliance and lien waivers as part of the subcontractor workflow
For payments, a draw summary page allows general contractors to view status across all invoices on a draw period, without calling project accounting. An invoice control log communicates changes across invoice lifecycle between general contractor and subcontractor. Instead of having to see to everything, the system automatically handles the routine events, and you manage only the exceptions.
Figure 6: Draw summary page to manage invoices
Madelyn Smith, operations financial analyst at Suffolk, says:
“Some of our project controllers who have been with Suffolk for years feel like Oracle Textura gives them the ability to complete the full paperwork cycle of something that is historically so drawn out, tedious, and manual in a drastically condensed timeline.”
Alisha Graham, sales consultant, Oracle Construction and Engineering, contributed to this story.
See Oracle Textura in action and find out why contractors of all sizes choose this solution to increase productivity and mitigate risk.
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.