Helping construction companies meet stricter payment rules
As the government uses its immense purchasing power to turn the screws on construction laggards, there has never been a better time for contractors to invest in this area.
Since April 1, all bidders for public sector contracts over £5million must show proof of paying 95% of invoices within 60 days. For those who score 90-95%, a clear improvement plan must accompany their bid, while bidders who score less than 90% are completely disqualified.
Following last year’s changes to the prompt payment code, which mean that signatories must pay 95% of businesses with fewer than 50 employees within 30 days, the need to pay on time is increasingly evident.
So why are entrepreneurs still wasting time and energy paying unpaid invoices from frustrated suppliers?
“Only 25% of the top 250 contractors have adopted e-invoicing that can automate the invoicing process for them”
“I think it comes down to a fear of change,” says Rebecca Sperti, sales manager, supply chain solutions at Causeway Technologies. “We see organizations making incremental improvements, but not addressing the underlying cause of their inefficient processes.”
She adds: “They try to avoid impacting their supply chain, so they just adopt PDF attachments or scan the paper invoices they receive, but that doesn’t solve the problem. Our analysis shows that 10% of all invoices are rejected simply because they do not contain the necessary information. This represents tens of millions of invoices manually verified and returned to the supplier across the construction industry each year. »
Transparent and timely payment
Sperti says the technology can help suppliers and their customers achieve their common goal of transparent and timely payment. Causeway’s Tradex platform can be used by contractors to receive, validate and match invoices to purchase orders and “goods received” notes, and automatically trigger payment.
“Only 25% of the top 250 contractors have adopted e-invoicing that can automate the invoicing process for them. The key lies in the early validation of the content of the invoice received,” she explains.
“If an invoice submitted via Causeway Tradex does not contain any of the necessary information, it will be sent back to the supplier for correction within seconds. This type of automated intervention not only saves time and administrative costs at both ends; it speeds up the process of paying the bill and, most importantly, improves trust and understanding. »
Three decades of use
Causeway Tradex was created specifically for the construction industry, taking into account its peculiarities, and it has accumulated three decades of use. It already has a community of some 75,000 construction-related suppliers, and more are joining all the time. Many regularly ask new customers to use it.
Construction suppliers can log into the free Causeway Tradex portal to submit invoices and view an invoice’s status, creating more transparency and fostering stronger relationships, which ultimately pays dividends on-site. .
Sperti says that when new prime contractors join, they typically find that 70% of their supply chain is already using Causeway Tradex to bill other contractors. “That means it’s actually often more disruptive not to adopt this technology,” she adds.
Learn more: causeway.com/prompt