Choosing The Right Contractor Billing Software For Your Business

Beyond sending invoices on-time, it Bookstime is essential to make sure they are also clear and accurate to avoid disputes. Procore is committed to advancing the construction industry by improving the lives of people working in construction, driving technology innovation, and building a global community of groundbreakers. Our connected global construction platform unites all stakeholders on a project with unlimited access to support and a business model designed for the construction industry. While some owners manage all the project billing on their own, others will bring in architects or a construction manager who will handle billing for them. A third party reviewing the billing may necessitate an onsite review of the work done to date.

How Construction Billing Methods Impact Compliance and Risk Management

This method receive payment is common in consultancy or speciality construction services where ongoing availability is required. Advanced billing in construction is a method where payments are finalized before a project begins — usually in the form of a lump sum payment. With any luck, billing will be straightforward, including submitting pay applications, invoices, receipts and lien waivers. However, it’s the contractor’s responsibility to understand what backup documentation is required to keep payments coming. Before you get started, it’s important to know how much you have to support a new billing solution.

• In a  time and materials contract, the contractor includes profit margins in the hourly prices quoted to the owner and the exact scope of work is not clearly defined or is expected to change.
• Buildern automates the tracking of the remaining and already claimed value of a project’s work plan thus providing a realistic overview of the actual amount.
• Choosing the right billing method is essential to ensure accurate billing, reduce disputes, and maintain profitability.
• It’s important to check that your current accounting software will integrate smoothly with your new billing solution, as well as any project management tools or business intelligence applications.
• Contractors rely on prompt payments to fund ongoing operations, pay employees, and purchase materials.

Send invoices on time

This seems like a simple QuickBooks practice but sending timely invoices is not always done. When invoices are sent late, payments are almost always going to arrive late as a result. Arrears billing in construction is the process of billing at the end of a project. Payment is sent out as a lump sum once all stakeholders have signed off and approved the final product. Contractors and construction businesses that rent equipment should consider getting construction equipment rental insurance. This type of insurance covers the cost of replacing rented tools and equipment if they get…

• With Copilot’s client portals, your clients can log into their own portal at any time to view invoices, track progress, and communicate with you directly — creating a seamless client experience.
• If you miss a measurement or have to go back and recalculate, your estimates can be severely off the mark.
• Bonus points if the online data is visible to all parties so discrepancies can be avoided completely by everyone being on the same page.
• Depending on the value of the lump sum contract, you’ll likely need to meet AIA billing requirements for monthly progress billings.
• The complexity and meticulous nature of AIA billing mean that errors can have significant implications, potentially leading to disputes or compliance issues.
• Also known as AIA-style progress billing, this method differs from fixed price progress payments by invoicing upon completion of specific categories or per cost code within the project.
• Looking to reduce time to payment, improve risk management, and attract more customers?

Fixed Price Billing

By using a contingency fund, the contractor can cover the costs of some changes to the original scope of work. Make sure you also develop a contingency plan for potential construction billing methods issues, including who to reach out to at your provider. It’s ideal for consulting agencies that have simple billing needs and want a lightweight project management tool that integrates into the same platform. In other words, it’s designed for businesses that don’t need complex solutions and adopt a less is more approach.

What are the different construction billing methods?

• Before you get started, it’s important to know how much you have to support a new billing solution.
• Software like Knowify turns this otherwise lengthy task into a process that takes just a few clicks.
• Progress billing allows those who are billing (usually contractors) to get paid in regular intervals as the project progresses.
• Understanding construction billing methods helps you to choose the approach that matches your project’s specific needs.
• Longer payment terms lead to higher debt ratios which can be detrimental to a company’s finances.

While not used as often as other methods like progress, it can still be used for small projects or work for trusted clients. Lump sum billing occurs when both parties agree to the price of an entire project before construction begins. Lump sum payments provide several advantages to contractors since they know they will have the necessary funds before a project begins. Also known as advanced billing, it is a method used by construction companies to protect themselves from unforeseen expenses that might arise during the project.