Going digital will soon pay off

Could a more streamlined, digital approach solve the construction industry’s payment problem?

After the pandemic, many industries are still recovering from supply chain issues. The construction industry perhaps knows this more than most.

With complex supply networks that rely on prompt delivery and payment to run smoothly, construction has suffered some of the worst disruption. Moreover, supply chains are now more tenuous than ever with the added stress of inflation.

A strong and healthy supply chain is vital for project predictability and success, so the industry needs to adapt to survive.

“A huge part of the industry suffers from the broken payments ecosystem”

Supply chain payments are arguably the most pressing issue, with late and missed payments prevalent. Former business secretary Grant Shapps recently called for a review of UK payment systems, to evaluate the “culture and impact of late payment”. This could provide an unfortunate indictment of the sector.

SMEs struggle with small financial reserves, making cashflow their lifeblood. This means a huge part of the industry suffers from the broken payments ecosystem. But there is little time for admin, which often causes late payments and oversights that lead to ‘smash and grab’ disputes.

The industry needs an accurate, reliable and swift method of processing payments to provide transparency for both contractor and subcontractor. One solution would be the digitisation of the payments ecosystem. Transitioning to digital may seem complex, but it can be done in a matter of days.

Indeed, there are a good number of firms keen to act responsibly when it comes to prompt payments and have taken up a modern, digitised approach. Some of these firms have saved up to 50 per cent in admin time assessing applications and variations, making timely payments much more likely.

Payapps’ digital solution is already helping the industry modernise and be more resilient by streamlining the payment process. Annually, £6bn worth of applications for payment are processed via Payapps’ software, providing contractors and their supply chain with efficient, secure and transparent certification.

All information is centralised so there is no need to trawl through emails and piece together information from separate spreadsheets. Submissions are standardised to the contractor’s specification, ensuring there are no errors and no need to spend more time resubmitting an application for payment. As data is collated centrally, there is a transparent and single source of truth.

Payapps also helps to reduce risk, providing automated reminders to serve payment and pay-less notices as deadlines approach, reducing the likelihood of disputes and project delays.

Lastly, but arguably most importantly, it provides visibility to both contractors and their subcontractors of payment applications and those certified to be paid, giving clarity around cashflow. As GF Tomlinson framework and pre-construction development manager Carl Wiltshire explains: “Payapps enables me to manage cashflow and forecast detailed cost-reporting instantly.”

Payapps is the safe, secure and reliable solution or processing applications for payment efficiently and fairly.

    For more information, visit payapps.com/uk