Delayed payments are among the most stressful parts of any workforce. In modular construction, this is all too common. Fragmented invoicing is often expected, with payments split across multiple stages, such as design, factory, transport, and installation, causing confusion and delays.
Manual review processes may also delay approvals and fund releases. A lack of integrated systems and transparency further contributes to errors and the ability to track progress tied to payments. This can lead to disputes or mistrust. Digital solutions facilitate a seamless process featuring centralized payment integration, real-time dashboards and access, and automation.
Below, we examine three key aspects of a payment framework:
Documentation Needs
Construction companies require documentation throughout all phases of modular projects, including contractual agreements, change orders, proof of delivery, and standardized invoices. Documentation should be clearly stated, timely, and easily accessible.
Approval Processes
Companies should define who can approve what, depending on roles, and set escalation paths. Approval processes can involve automated routing with back-office personnel routing invoices and expense claims to the appropriate project lead or finance managers. Logs are also crucial for compliance and internal reviews.
Timeline Management
Automated reminders, payment triggers, cash flow forecasting, and late payment alerts help keep payments on track. Companies can link payments to clearly defined criteria or stages, such as on-site assembly.
Here are three valuable digital solutions for an updated payment framework:
Mobile Processing
Mobile devices empower project managers, field supervisors, and other personnel. They can review and approve on the go, minimizing delays. Teams can also capture expenses directly from job sites and receive real-time notifications regardless of location.
Documentation Tools
Digital forms enforce standardization and fillability for invoices, change orders, and payment requests. E-signature integration enables fast contract sign-offs and approvals without paper, printers, or scanners. Automated records securely store financial documentation in the cloud for access anywhere.
Integration Capabilities
Companies can sync enterprise resource planning systems and accounting software to ensure accurate financial tracking and reduce double entry. Teams can also link payments with an integrated project management platform. External partners also have access to vendor and subcontractor portals.
Implementing Streamlined Digital Payment Solutions
Implementing digital payment solutions in modular projects doesn’t have to be tedious and cumbersome. Companies should start by mapping existing payment workflows, defining a digital workflow structure, and researching and selecting the right tools. Once they have established a blueprint, managers should provide resources and train finance staff, project managers, and other personnel, depending on their responsibilities.
Companies must set key milestones and track points, such as onboarding or the first digital payment issued. They should also monitor KPIs like payment approval times and collect feedback for improvement.
Measuring success includes processing time, error reduction, and team efficiency. For example, companies can measure the time from invoice submission to payment completion, as faster processing improves cash flow and vendor satisfaction. For error reduction, measuring the number of payment-related errors reduces rework, compliance risks, and delays. For team efficiency, consider the number of payments processed within a set timeframe. This can optimize workload and staffing. Companies can set targets for improvement in each of the areas.
By combining mobile processes, digital documentation tools, and integration capabilities, companies can avoid the greatest pitfalls of payment processing in modular construction. These digital characteristics enable teams to meet the prime needs for payment documentation, approval processes, and timeline management.