FinTech South 2019:How FinTech Can Help Construction Contractors
I attended the FinTech South conference in Atlanta on April 23rd, 2019. The conference featured thought leaders across the FinTech space. This conference focused particularly on the world of payment processing. Flashtract gains valuable relationships with key players in the industry through attendance. Additionally, we learn the latest developments across the space.
Relating to construction, Fintech South gives a great look at the industry's direction. Particularly as construction adopts the latest and greatest in software and tools. The following blog post discusses my three biggest takeaways from FinTech South and how they impact the construction payment process.
Data Security & Financial Tech
As you expected at a FinTech conference, a lot of the topics centered around data security. Many FinTech companies sought a larger role in everyday transactions. Additionally, they focused on the ability to guarantee ironclad security. Increasingly security-focused companies laser-focus on information security and customer privacy.
Commercial construction is a $2 trillion industry annually in the United States. It isn’t unusual for a multi-million-dollar transaction to have 10 or more touch points, across multiple companies. Lender approvals and contractor pay applications require many conversations. Transmitting payment information and financial data between parties increases the risk of a security breach or fraud. Relaying data through paper documents makes this especially true.
The Importance of Data Security in Construction Tech
Data security is critical in the construction industry, yet risky practices prevail. Personally, I have seen that many contractors are hesitant to adopt payment management software because of security and data privacy concerns. As a result of these concerns, contractors still largely rely on a paperwork-heavy manual payment process. This paperbound process is error-prone, far less secure, and creates difficulty tracking payments and other pertinent information.
Many lenders and other related companies in the industry now require better data security. The construction industry must adopt these technologies and meet the requisite security levels. Unfortunately, many companies today lack adequate tracking of payments and billing. As a result, several companies like Textura Payment Management, eSub, and PayApps.com, have tried to modernize the construction payment process. These solutions excel at digitizing individual parts of the construction payment process. However, none offer an affordable, complete solution.
Scaling a Business with Fintech Tools
Using FinTech tools helps small businesses quickly scale for competitive advantage. These small companies adopt programs such as Quickbooks, Sage, and ComputerEase frequently. Accordingly, FinTech tools must seamlessly integrate with business-critical industry-standard software.
For the construction industry, it is easy to see where FinTech software could come into play. By using construction payment application software, contractors can reduce the time it takes to process payments. When payments are processed more efficiently, relationships are strengthened.
It’s no secret that subcontractors give more attention to projects that pay quicker. Unfortunately many contractors and owners are hesitant to pay more quickly due to cash flow concerns. While this is a valid concern, studies show a larger problem. McKinsey reports that construction projects typically take 20 percent longer to finish than scheduled and are up to 80 percent over budget. These numbers show that something must change.
How Should You Use Financial Tech To Your Advantage?
The labor market is tighter than ever. As a result, if you want your project to finish on time and under budget you must find some way to differentiate your project. The number one way to separate yourself from the competition is the use of construction billing software. This software brings transparency to the payment process as well as the ability to pay more quickly.
Early adopters of payment management software are rewarded in several ways. Firstly is with better subcontractor relationships. Many subcontractors are frustrated with hostile programs that don't take their needs into account. Secondly, early adopters find projects finish faster than the industry average. Pay applications become easy and transparent. In return, subcontractors have more cash on hand. Steady cashflow results in larger crews dedicated to your job. Lastly, adding transparency to the result increases confidence for all involved parties.
The Future of Payment
As technology becomes increasingly entrenched in everyday life, the ways we make payments are changing too. The way humans exchange money is constantly evolving. For example, debit cards made their debut in 1970 and online banking start in 1997. Cash is less and less common in every day payments. The reason why? Tracking cash is quite difficult. In contrast, digitization makes budgets more easily managed.
Additionally, paper is all but obsolete in most industries. This means paper-based payments are on their way out as well. For the construction industry, the use of construction invoicing software offers better tracking overall. Staying on track and on-budget becomes easy with pay app and cashflow tracking. Finding a secure, yet efficient, construction payment system is paramount for growing businesses. As the number of payments increases, tracking becomes that much harder without this software.
Consumer use of mobile banking rises. A quarter of all Americans used online banking in 2014. By 2016, over half of consumers used mobile banks.
According to skeptics, contractors do not want change. As a result, they believe payments will remain paper-based. However, this is only somewhat true. In reality many contractors actively seek better tech. Therefore, industries adapt as more Americans use modern tech.
How Can Flashtract Help?
Flashtract is a highly secure platform, meaning payments and billing information is protected, yet accessible to the right people. When contractors, workers, and third-parties can be securely billed and efficiently paid, projects will run more smoothly.
By using Flashtract, contractors can rest assured that all billing information can be easily accessed. Flashtract also integrates with leading accounting software packages, saving hours of tedious work. Construction companies grow more efficiently with our software. With Flashtract, builders can focus on building, not billing. Furthermore, companies can review and approve work remotely with Flashtract. Businesses reduce costly site visits by reviewing and approving work remotely. Flashtract empowers contractors, workers and third-parties do what they do best. When your team worries less about logistics, projects flow seamlessly.
Making sure projects stay on track and on budget is tantamount in construction. Having systems in place that offer better tracking of cashflow and payment facilitates this.
Get more info on Flashtract
Flashtract’s cloud-based platform offers documentation and tracking for all funds spent on a project. We give contractors and owners the assurance that projects are completed on-time and on-budget. Flashtract houses all payments are housed in the software. Every payment is tracked and only released with the approval of key stakeholders. The construction industry needs to take advantage of the latest tools available. Additionally, our payment management tools empower efficient growth through digitization. Employees cut down the time spent on billing.
Most importantly, save your company time and money when you use Flashtract. For more information on our software, book a demo today!