Entrepreneurs are turning to payment apps to speed up invoicing

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Jeff Scalisi, vice president of operations at Livermore, Calif.-based Architectural Glass and Aluminum, had no idea his company’s billing was having issues until a tech solution arrived to fix them.

Jeff Scalis

Image source: architectural glass and aluminum

Scalisi was reluctant to hand over something he believed “needed to be checked by us” when contacted by a representative of site linea software tool specifically designed to automate the process of invoicing contractors three years ago.

When he learned that site line could keep all of AGA’s insurance documents in one place and seamlessly perform 30, 60 and 90 day invoicing even on smaller projects, he had to try – and now he’s hooked.

“We were doing everything with spreadsheets, Word documents and files on servers,” Scalisi said. “I didn’t even realize how awkward it was.”

Siteline is one of the few financial technology, or fintech, solutions that have sprung up in recent years to handle billing and payment complexities unique to entrepreneurs. Often pioneered by entrepreneurs with family ties to the construction industry – who have seen firsthand how the flow of capital can make or break a business – these technologies track and measure everything from allocation and delivery of materials to financial projections, to compliance with risk management, to keeping projects running. time, on budget and cost effective.

Construction Payment Apps

Invoice pays vendors upfront and offers contractors 120-day payment terms.

BlueTape offers quick access to interest-free credit as well as mobile and online billing and payment.

Brick provides workflow automation and forecasting and a debit card that offers rewards.

Built streamlines the management of lien waiver and electronic payments and simplifies the management of contractors.

ECL software automates and centralizes contracts, quotes, change orders, RFIs, estimates and payroll.

Flexbase the zero rate Visa card offers credit based on future bills rather than personal credit score and tracks receipts and bills.

GCPay automates the payment request process between general contractors and subcontractors.

Level set helps contractors and suppliers manage the payment process, including material financing, electronic payment, financial risk analysis, lien rights and waiver management.

Mobilization funding provides access to capital through contractual loans and purchase order financing.

Rabbet automates and centralizes construction finance for lenders and developers using AI.

“The reality is that most fintech companies have ignored really tough industries like construction,” said Zaid Rahman, founder and CEO of Flexbase, which merges a payment platform with a zero-interest line of credit. in what Rahman hopes to transform construction payments. Stripe reshaped e-commerce and Square redesigned point-of-sale shopping.

“We’re reimagining how money flows in and out of a construction business,” said Rahman, who comes from a family of builders and architects and has heard countless stories around the dinner table about their struggles. cash. “We believe there is an opportunity to create an experience designed for builders by builders.”

Flexbase’s first product is a high-cap, zero-rate business credit card that he described as “in effect, a free float” for 60 days, allowing contractors to purchase materials without tying up their entire capital pending customer payment.

When contractors use the Flexbase card, they also connect to a system that automates the flow of payment documents, including value schedules, lien waivers, notarizations, current wages, insurance and compliance while helping subcontractors follow deadlines.

Gloria Lin and Joel Poloney

Image source: siteline

Construction invoicing has traditionally been a “notoriously complex, manual, paper-based process,” said Siteline founder Gloria Lin, whose father was a civilian contractor. “And the catch is that even though it’s a penny off, if the documents aren’t perfect, they’re sent back to the next payment cycle 30 days later. It can stretch over and over again, and it’s very taxing for trade contractors.

Risk management

Slow payments to general contractors and subcontractors cost industry $136 billion in 2021, up 36% from 2020, annual report says Construction Payments Report from Rabbet, a fintech company serving real estate developers and construction lenders. When asked what they would change in their payment process, many entrepreneurs pointed to the need for automatic, instant, or direct payments.

“Unforeseen uncertainty in the supply chain is forcing contractors, developers and lenders to take a collaborative approach to address price and schedule risks in 2021,” said Will Mitchell, CEO of Rabbet. “The pandemic has further shed light on the challenges of existing processes, and the need for transparency, automation and centralization of construction payment processes has never been greater.”

In its 2021 Construction Cash Flow and Payments Report, Levelset, which offers a suite of software that digitizes payment processing and helps contractors finance materials with extended payment terms, found that 79% construction companies that accept electronic payments get paid faster.

Levelset also helps with risk management by sending alerts when another contractor working on a project has payment issues and monitoring jobs for red flags like mechanics liens so “you can protect yourself and anticipate payments. slow,” said Andrew Dunn, vice president of Levelset. of financial products.

User-friendly

Cloud-based and mobile-friendly, most fintech solutions require very little or no training. The BlueTape payment and finance platform, for example, allows entrepreneurs to make and receive payments on their mobile devices via SMS. They don’t even need to download an app.

“Sometimes when we have initial conversations with contractors they can be skeptical – it sounds too good to be true when we tell them it doesn’t have a big installation or integration element,” said said BlueTape co-founder and CEO Yaser Masoudnia. “But once they try it with a few clients, they love it and immediately adapt it for use with all of their clients.”

Siteline’s Lin, who helped build the prototype of Apple Pay and served as the first product manager for Stripe, and co-founder Joel Poloney, who brought the game to the masses as co-founder and lead developer of Farmville, understood the importance of keeping their solutions “simple”, Lin said.

“It’s easy to use, but it’s also a powerful tool,” Lin said. “We manage a ton of complexity behind the scenes while presenting things in a simple interface to users. Our customers tell us it’s magic.”

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