Cash flow issues are the number one reason businesses statistically fail. A study by U.S. bank reported 82% of failing businesses listed cash flow as the top reason for closures. In an increasingly tough economy with fierce competition, construction firms walk a fine line on razor-thin margins. These firms are always on the watch for ways to lower the bottom line and cushion their cash flow.
Innovative payment processing solutions can offer a solution that will improve payment options for their clients and save precious billing time.
Faster payment solutions means less money spent hounding clients for payment and smoother cash flow. Contractors who are paid by check spend more time sending out invoices, waiting on payments, and then waiting on checks to clear. This often includes a number of resources spent on tracking down unpaid accounts. According to the Levelset 2020 National Construction Payment Report.
70% of organizations report spending as much as 5 hours per week chasing payments. Nearly 30% of organizations reported spending even more time, with almost 4% of organizations dedicating a full-time job position to chasing payments. 30% of firms aren’t very satisfied with that timeline, reporting they often have to send invoice reminders and lien waivers.
Credit cards enable many clients to pay faster with a far more convenient method than mailing a check. This can help reduce long-term invoicing practices.
Contractors cannot continue their operations without adequate cash flow. Yet, even once the check is put in the mail, most contractors still have to wait.
More than 42% of construction firms say they wait for more than 31 days to receive payments after sending out an invoice.
When credit cards are used, contractors can get the funds within a day or two in most cases. There is no wait for the check to be created, mailed, or submitted to the bank.
When payments and invoices remain electronic, it is easier for firms to streamline their books. Innovative payment solutions can include mobile payment options and contactless card payment possibilities.
It is important to note that not all card processing solutions are the same. In order to find the best solutions, firms need to partner with a card processing company they trust. Otherwise, they might become locked into long-term contracts, costly equipment, and shifting fees.
But, with the right innovative solution, construction firms can have access to faster payment processing solutions that are affordable and convenient. Modern firms can spend more time working their craft and less time concerned with hassling clients to make timely payments.