Jeff Scalisi, vice president of operations at Livermore, California-based Architectural Glass and Aluminum, had no idea his company\u2019s billing had issues until a tech solution came along to fix them.<\/p>\n
Jeff Scalisi
\nImage Source: Architectural Glass and Aluminum<\/p>\n
Scalisi was reluctant to turn over something he believed \u201cneeded to be controlled by us\u201d when he was contacted by a representative from Siteline, a software tool designed specifically to automate trade contractors\u2019 billing process, three years ago.\u00a0<\/p>\n
When he learned that Siteline could keep all of AGA\u2019s insurance documents in one place and seamlessly complete 30-, 60- and 90-day billings, even on smaller projects, he had to give it a try \u2014 and now he\u2019s hooked.\u00a0<\/p>\n
\u201cWe were doing everything with spreadsheets, Word documents and files on servers,\u201d Scalisi said. \u201cI didn\u2019t even realize how clunky it was.\u201d<\/p>\n
Siteline is one of a handful of financial tech, or fintech, solutions that have cropped up in recent years to handle the billing and payment complexities unique to contractors. Often launched by entrepreneurs with family ties to the construction industry \u2014 who have seen firsthand how capital flow can make or break a company \u2014 these technologies track and measure everything from material allocation and delivery to financial projections to compliance to risk management, keeping projects running on time, on budget and profitable.<\/p>\n
Billd<\/strong> pays suppliers upfront and offers contractors 120-day payment terms.<\/p>\n BlueTape<\/strong> offers quick access to zero-interest credit as well as mobile and online invoicing and payment.<\/p>\n Briq<\/strong> provides workflow automation and forecasting and a debit card that offers rewards.<\/p>\n Built<\/strong> streamlines lien waiver management and electronic payments and simplifies lower-tier contractor management.<\/p>\n ECL Software<\/strong> automates and centralizes contracts, submittals, change orders, RFIs, estimating and payroll.<\/p>\n Flexbase’s<\/strong> zero-interest Visa card offers credit based on future invoices rather than personal credit score and tracks receipts and invoices.<\/p>\n GCPay<\/strong> automates the payment application process between general contractors and subs.<\/p>\n Levelset<\/strong> helps contractors and suppliers manage the payment process, including material financing, electronic payment, financial risk analysis and lien rights and waiver management.<\/p>\n Mobilization Funding<\/strong> provides access to capital through contract-based loans and purchase order financing.<\/p>\n Rabbet<\/strong> automates and centralizes construction finances for lenders and developers using AI.<\/p>\n<\/div>\n \u201cThe reality is that most fintech companies have ignored really difficult industries like construction,\u201d said Zaid Rahman, founder and CEO of Flexbase, which merges a payments platform with a line of zero-interest credit in what Rahman hopes will transform construction payments the way Stripe reshaped e-commerce and Square recast point-of-sale purchasing.<\/p>\n \u201cWe\u2019re reimagining how money moves in and out of a construction company,\u201d said Rahman, who comes from a family of builders and architects and heard countless stories around the dinner table about their cash flow struggles. \u201cWe think there\u2019s an opportunity to create an experience that\u2019s designed for builders by builders.\u201d<\/p>\n Flexbase\u2019s first product is a high-limit, zero-interest corporate credit card that he described as \u201ceffectively, a free float\u201d for 60 days, allowing contractors to buy materials without tying up all their capital while they wait for client payment.<\/p>\n When contractors use the Flexbase card, they also plug into a system that automates the flow of payment documents, including schedules of values, lien waivers, notarizations, prevailing wages and insurance and compliance while helping contractors track deadlines.<\/p>\n Gloria Lin and Joel Poloney Construction billing has traditionally been a \u201cnotoriously complex, manual, paper-ridden process,\u201d said Siteline founder Gloria Lin, whose father was a civil contractor. \u201cAnd the kicker is, even if it\u2019s a penny off, if the paperwork is not perfect, it gets bumped to the next payment cycle 30 days later. It can stretch on and on, and that\u2019s super painful for trade contractors.\u201d<\/p>\n Slow payments to general contractors and subcontractors cost the industry $136 billion in 2021, a 36% increase over 2020, according to the annual Construction Payments Report<\/a> from Rabbet, a fintech company serving real estate developers and construction lenders. When asked what they would change about their payments process, many contractors reported the need for automatic, instant or direct payments.<\/p>\n \u201cUnforeseen uncertainty in the supply chain requires contractors, developers and lenders to take a collaborative approach toward addressing price and schedule risk in 2021,\u201d Rabbet CEO Will Mitchell said. \u201cThe pandemic further illuminated existing process challenges, and the need for transparency, automation and centralization in construction payment processes has never been greater.\u201d<\/p>\n In its 2021 Construction Cash Flow & Payment Report<\/a>, Levelset, which offers a suite of software that digitizes payment processing and helps contractors finance materials with extended payment terms, found that 79% of construction businesses that accept electronic payments get paid faster.\u00a0<\/p>\n Levelset also helps with risk management by sending alerts when another contractor working on a project is having payment problems and monitoring jobs for red flags like mechanics liens so \u201cyou can protect yourself and get ahead of slow payments,\u201d said Andrew Dunn, Levelset vice president of financial products.<\/p>\n Cloud-based and mobile-friendly, most fintech solutions require very little, if any, training. Payment and financing platform BlueTape, for example, lets contractors make and receive payments on their mobile devices via text. They don\u2019t even have to download an app.\u00a0<\/p>\n \u201cSometimes, when we have initial conversations with contractors, they can be skeptical \u2014 it seems too good to be true when we tell them this doesn\u2019t have a big installation or integration piece,\u201d said BlueTape Co-founder and CEO Yaser Masoudnia. \u201cBut once they try it out with a couple customers, they love it and immediately scale it up to use with all their customers.\u201d<\/p>\n Siteline\u2019s Lin, who helped build the prototype for Apple Pay and was the first product manager for Stripe, and her co-founder, Joel Poloney, who brought gaming to the masses as the co-founder and lead developer of Farmville, understood the importance of keeping their solutions \u201cdead simple,\u201d Lin said.\u00a0<\/p>\n \u201cIt\u2019s easy to use but also a powerful tool,\u201d Lin said. \u201cWe handle a ton of complexity in the background while presenting things in a simple interface to users. Our customers tell us it feels like magic.”<\/p>\n This item was originally posted here: Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"
\nImage Source: Siteline<\/p>\nRisk management<\/h3>\n
User friendly<\/h3>\n