If you’re in construction, chances are you’ve had an issue with cash flow in your business at some point or another. Most construction firms report that they’ve had cash flow issues in the past, and many of them said it was something they had to deal with on a regular basis.
So is this just an occupational hazard that you must accept, or can something be done about it?
We believe that these are problems you can fix.
Keep reading to explore the top cash flow complaints construction owners have and their possible solutions.
Complaint #1: Slow Paying Customers
Since construction owners often have to pay for materials and equipment upfront, customers who don’t pay on time leave you without the cash you need to run your business.
And this doesn’t just affect current cash flow. Customers who don’t pay on time can cost you more in the future by causing late fees and finance charges to accrue.
The right to file a mechanics lien is an important tool that construction owners have at their disposal to ensure that they are paid for the job.
But these can be confusing and cause a lot of paperwork to keep up with.
Fortunately, Flexbase can take care of this for you. We will …
- Create lien waivers
- File preliminary notices; and
- Create mechanics liens
… on your behalf.
This will not only free up your time and save you the hassle of understanding differing laws and requirements of each state, but it’s also more likely to get you paid when you need it.
Complaint #2: High Payroll Burden
Most construction companies are labor-intensive and having to pay your employees every week or two can cause financial strain — especially if customers aren’t paying on time as mentioned previously.
But you can’t tell your employees that they won’t be paid until customers take care of their end, can you?
If at all possible, try to use subcontractors to do most of the work. You often only have to make monthly payments in these cases, freeing up more cash for other expenses the rest of the time.
You may also be able to use pay-if-paid or pay-when-paid clauses with subcontractors to shift the financial burden away from yourself.
Complaint #3: Tracking Invoices Is Hard
You won’t get your money until you invoice your customers. But many construction owners find it hard to quickly and consistently send invoices and payment reminders.
And once they have been sent, you need a system to keep up with who has paid and who hasn’t. This can add a huge burden to all the other things you have to do in a day.
Enter Flexbase. We generate paperwork automatically and allow you to send construction invoices to your customers in two minutes.
We’ll even help you negotiate payment terms and offer discounts for early payment. There’s a reason Flexbase customers get paid 63% earlier on average.
And once you have been paid, you can easily keep track of everything within the app. Gone are the days of filing papers (or worse, having giant stacks of them on your desk).
Complaint #4: Tracking Receipts Is Hard
Depending on how many employees you have in your company who are authorized to make purchases, you may have receipts coming in from all over the place. These can be nearly impossible to keep up with!
Even worse, you may have workers who forget to submit receipts entirely — and then you’re blindsided by money that has mysteriously disappeared from your account.
With the Flexbase card, tracking receipts has never been easier. Authorized users are reminded to take a picture of their receipt after a purchase, and everything is stored in one convenient place.
We will track all the numbers for you and generate an expense report. No more bags full of paper receipts to try to make sense of.
Complaint #5: People Can’t Find Us Online and We Aren’t Getting Enough Jobs
It’s difficult to run a successful business these days without an online presence. Even if you do top-notch work and have an excellent reputation, you must have a strategy when it comes to being found for jobs online.
To make it easier for customers to find you on the internet, you must invest in search engine optimization (SEO). If you don’t know what that is, it’s time to educate yourself.
If you are employing SEO, you should know that if it isn’t done the right way, it is unlikely to help you. Some important questions to consider are:
- How much money are you investing?
- Are you seeing results?
- Is your optimization being done by someone in-house or a professional agency?
In the right hands, a small investment in the SEO process can grow your business and increase cash flow.
Complaint #6: It’s Difficult to Properly Budget for Retainage
On top of all of the other cash flow difficulties construction owners must face, there’s the issue of retainage. This is when part of a payment is withheld until a project is complete or substantial progress has been made.
Retainage is usually built into a project to protect owners from paying for something that doesn’t turn out the way they wanted.
But for construction owners who have supplies to buy, equipment to rent, and workers to pay, this can be a huge burden.
Having access to an app like Flexbase helps you establish good accounting and financial practices with ease, making it more likely that you’ll have the money you need to cover retainage withholding.
And if you do need a little extra cash on hand, Flexbase Capital lets you borrow instantly, with terms and features that are specifically designed for construction companies.
Not only does Flexbase solve many common problems in the industry, but we also offer:
- 60 days* to pay, 0% interest
- Up to 10x credit limits based on your future invoices and projected business
- No security deposit required
Schedule a demo today and say goodbye to your cash flow worries.