Embracing Finance Technologies in the Construction Industry
Over 60% of construction companies say technology spending will increase as a result of Covid-19. They see increased use of technology as a way to streamline operations and therefore reduce costs to help them cope with increasing price pressures elsewhere.
One area that has great potential to benefit from the efficiencies that technology brings is the finance operation.
The typical finance manager in a construction business has multiple teams working on multiple spreadsheets across multiple departments, business units and projects, so getting a single view of spend is very hard. A lot of financial admin comes in on paper so there’s a lack of real-time visibility and it’s hard to manage cashflow.. The true costs of a project often only become apparent when it gets to site and there are often significant variations against contracted prices, so managing budgets is challenging. And with slow, paper-based processes the norm, it’s difficult to pay invoices and reimburse employee and contractor expenses in a timely fashion.
Cloud-based solutions and mobile apps that harness AI and machine learning technologies enable you to embrace technology to get near real-time visibility of spend, manage risk, reduce errors, see greater detail to enable strategic decision-making and improve the employee experience.
The SAP Concur suite, for example, automates travel, expense and invoice. It comes with an ecosystem of apps and partners to extend its value even further. There’s a single platform across mobile and desktop so users have the same simple experience whether they’re on site or in the office. It integrates with most ERP, CRM, HR and accounting systems – and because it’s an SAP solution, it connects automatically to systems you may already have in place such as SAP SuccessFactors.
Let’s take a closer look.
Transforming Travel and Expense with Concur Expense
With so many people travelling on behalf of the business, managing travel and expense (T&E) a significant undertaking for most construction companies. It’s also a significant cost. T&E is typically one of the largest controllable annual expenses – second only to salary and benefits.
It has used SAP Concur solutions to automate and streamline a manual, paper-based expense process. They have helped the company address VAT leakage, enhance policy compliance and reduce the number of people in the business involved in receipt checking and receipt matching.
Highlighting one particular gain, Ross Offer, Corporate Systems Director at Atkins, comments:
“By using SAP Concur, we managed to prevent $9,000 worth of duplicate flights that would have otherwise been processed.”
The solutions also help to enhance the employee experience and improve contractor relations because they speed up the process, enabling faster reimbursement of out-of-pocket expenses.
Streamlining the Invoice Process with Concur Invoice
Concur Invoice is similarly transformational for the AP process.
It automates the complete invoice management process from invoice capture to payment. An invoice can come into the system via email, fax, paper or electronically. Once it’s entered the system, the data is extracted using advanced optical character recognition (OCR). It’s then validated automatically using machine-learning capabilities to process the data from each invoice.
Commenting on the difference it makes, one member of a finance team at a construction company, says:
“We are able to close our financial months on schedule, with few issues as a result of invoice processing. That was always a big delay before. Those benefits trickle down to our financial partners, lenders, bankers, bond companies, and others. They get accurate and timely financial information, which, in turn, has improved our financial rating as an organisation.”
The benefits translate to concrete bottom line savings. Organisations that use Concur Invoice save an average of £526,400 per year, including £109,000 on accounts payable-related costs. They have a four month payback period and see a three-year ROI of 634%.
Driving Clear Benefits
Research shows that UK companies that are best-in-class at managing spend information and maintaining data accuracy by using expense and invoice management solutions give themselves a clear competitive advantage:
- 36% better at capturing company spend data
- 23% faster at accessing data
- 27% improvement in profitability
- 26% improvement in productivity
Consider too the fact that less than 50% of organisations say they are “very prepared” to improve data analytics and increase automation of operations. This opens up even more opportunities to seize the advantage for those willing to embrace the possibilities.
So if you’re looking to technology to build business resilience and maintain organisational agility, take a look at our latest eBooks on the subject:
Controlling Spend and Compliance in the Construction Industry explores how businesses can develop the strongest controls to optimise spend. And discover how finance can lead the way in Embracing the Power of Digital Technologies in the Construction Industry.