Construction doesn’t happen in a bubble. Every project requires partnerships, materials, equipment, and more—leading to a continual load of invoices for construction companies and a high volume of payments. 

Construction companies have to stay organized and on top of records and payments so nothing falls through the cracks. But with so many moving parts and deadlines, manual data entry in accounts payable can lead to inefficiencies and errors. 

The solution for construction companies? Automation. Using automation software to streamline invoice processing reduces errors and improves cash flow management. That gives AP teams confidence in their invoice processing and frees time to spend on other strategic priorities. 

Let’s dive into how AP automation can transform processes, reduce errors, and create smoother workflows for construction companies. 

Manual AP Processes Cost Time and Money

On the surface, manual AP processing may not seem to affect the company. For many AP teams, manual processes are just how things have always been done. However, those small inefficiencies add up to significant time wasting that can have a ripple effect across the company. Consider these hidden costs of manual AP processing:

• Time-consuming processes. Tasks like invoice matching, approvals, and data entry take longer when done manually. That means employees are stuck doing repetitive, mundane work. On any given day, AP employees likely spend a large portion of their time processing invoices. 
  
  
• Higher risk of human errors. Invoices and AP documents are detailed, but leaving data entry and processing to humans increases the chance of error, potentially leading to duplicate payments, misallocated funds, and compliance issues.
  
  
• Cash flow bottlenecks. Manual systems often don’t operate consistently, meaning some invoices can process quickly, while others may get backlogged if someone is busy or out of the office. Those slow invoice approvals can lead to cash flow bottlenecks and stunt the company’s growth.
  
  
• Compliance issues. It’s easier for issues to fall through the cracks with manual workflows, which increases the chances of fraud and compliance issues. If these issues arise, recovering from them can be costly and time-consuming, creating even more inefficiencies. 
  
  
• Lack of real-time visibility. Manual processing leads to a lag in accounts payable, especially as invoices move through the approval process. Because there isn’t a centralized place for processing or tracking status, companies often lack real-time visibility into their finances. 

How AP Automation Transforms Construction Accounting

Clearly, manual processes can limit a construction company’s growth opportunities and lead to inefficiencies. Just because that's how things have always been done doesn't mean manual processes are the only way. There's a solution to these issues: AP automation.

AP automation platforms streamline invoice capture and digitization and automate approval workflows to route invoices based on job costs and cost centers. Even better, these systems integrate with accounting and ERP systems to eliminate duplicate payments and have a clear view of a company’s financial status and cash flow.

Here are five key benefits of AP automation for construction companies:

• Speed and efficiency. AP automation helps construction companies reduce invoice processing time by up to 80%—that means faster payments, better relationships because suppliers aren't waiting for payment, and bandwidth to take on more construction projects.
  
  
• Cost savings. Construction companies spend a lot of money paying employees to complete slow, manual tasks. By leveraging automation, construction companies can have lower labor costs.
  
  
• Real-time financial visibility. Instead of siloed financial information that has to be updated manually across multiple systems, AP automation updates in real time for an accurate view of finances integrated across multiple systems.
  
  
• Remote accessibility. Construction doesn’t always happen in the central office. AP automation software makes it possible for teams to manage invoices from anywhere, either in the field or in the office. That convenience decreases delays and helps everyone stay connected.
  
  
• Compliance and audit readiness. Manual records can easily get lost or misplaced, and filing them can be cumbersome. Invoice records stored digitally are easy to organize and retrieve when an audit arises. 

Choosing the Right AP Automation Software  

AP automation software can transform how construction companies operate. However, just like every company has unique needs, every AP automation platform has unique features. 

When choosing the right software for your company, look for a platform that is easy to use, especially for non-technical employees. Employees are less likely to be on board with moving to new software if it is confusing and they can't see the value. They may end up spending more time trying to understand the software than just doing the tasks themselves. AP automation software should also integrate with your company’s current existing accounting software so you can easily move data and ensure consistency and accuracy across financial teams. 

In addition, be sure to look for these five key features:

• AI-driven invoice processing. AI is at the heart of automation and learns with every transaction. AI is a powerful tool for construction companies and can find patterns and identify errors in invoices. 

• Customizable approval workflow. Every construction company has unique needs and processes. The best AP automation programs allow teams to customize the approval workflow so invoices can move seamlessly through everyone who needs to see them. 
  
  
• Real-time reporting. Automation allows for real-time updates, which provides total visibility into every transaction to stay in control of spending. 
  
  
• Accurate coding. AP automation software makes it easy to code expenses accurately by job, cost code, and category, so teams have a complete view of their budget and financial status. 
  
  
• Mobile reporting. Instead of waiting for teams to come to the office and submit invoices in person or from a desktop, AP automation software makes it easy to submit invoices and expenses from the field. All it takes is one photo of the receipt or invoice, and the software takes it from there. 

hh2 Document Flow is a leading AP automation software for construction companies because it offers all of these essential features with ease of use and customization to make an immediate impact for construction companies of all sizes. With customizable workflows and an intuitive design, there's a reason construction companies love hh2 Document Flow. 

Schedule a Demo of hh2 Document Flow

In the fast-paced construction industry, companies can’t rely on manual AP processes. Automation streamlines workflows, opening doors for incredible efficiency and financial transparency. Switching to AP automation can change how the entire company operates.

Now is the time to make the jump to AP automation. Evaluate your AP processes to see how automation could transform your company’s operations. 

Ready to streamline your AP process? Schedule a demo of hh2 Document Flow today!