It’s been a challenging year or so for companies in the construction and building industry. If you’re looking to recoup some losses and create a new revenue stream—we have the solution for you!
The shortage in building supplies, particularly lumber, has left many companies searching for ways to balance out higher costs. For example, the U.S. Bureau of Labor Statistics found that prices for lumber rose 89.7% between April 2020 and April 2021. This is the largest 12-month advance since they began tracking this data in January 1927.
Mark Young of a Wyoming-based western building supplier company told Tulsa World: “We’re definitely having problems getting stuff in,” he said. “The increase in pricing has gone above and beyond what we’ve ever thought it would be.”
What’s the solution? Empower your accounts payable (AP) team to leverage AP Automation and Virtual card (v-card) payments. AP Automation will save time and v-cards will generate new revenue via cashback programs. The money you spend when paying your suppliers/vendors can also be the money you earn!
Recouping lost revenue is key to any business facing losses. Discover how our solution can help construction companies and supplier companies today.
How AP Automation Benefits Construction Firms
Finding an additional revenue stream is more important than ever, especially as it’s beginning to look like it’s not just lumber experiencing a shortage. Per a recent article from Barrons, 95% of home builders are reporting shortages in appliances, plywood, windows and doors.
Now that you know more about how virtual cards can generate revenue, let’s look at how they can help companies like yours:
Track and issue payments from anywhere—job site, the office, or your home
Earn cashback on monthly spend for every transaction
Gain complete visibility with full payment and invoice history
Access to our around-the-clock support team
Not quite convinced? Here's what one of our construction clients had to say:
“We have been using this software for 20 years to issue accounts payable and payroll checks. About 1 year ago we added the virtual card payment feature which allows us to make accounts payable payments via single-use [virtual] credit card numbers. We export the payment information from our ERP system and import it into OnPay Solutions... Overall, the software works well! The customer support is very good and the response time is usually very quick.”
- Kirk Klinect, Group Manager in Information Systems | Hubbard Group Inc.
You might not hand write a letter today; as you would send an email. That’s faster and in real time. So why not streamline your processes with AP automation software and get rid of those outdated paper invoices and paper checks? There is no better time than now to being using invoice automation and payment automation.
Start by Adding Invoice Automation
Virtual cards are a great way to automate payments and generate revenue, but it’s only one aspect of AP automation.
Invoice automation results in reduced costs and more time that your finance team can devote to higher value tasks.
Our invoice automation solution:
Digitizes the entire invoice workflow
Reads data from your invoices regardless of the format
Handles coding and approval routing
Enables full visibility into history and tracking
Get a walkthrough on how OnPayConnect Invoicing works here.
Implementing paperless and automated invoice automation results in a finance department that runs better than ever. You can do so while keeping your current banks and ERP at no capital expenditure or adverse impact on your IT team.
Reach the Next Level With Payment Automation
Once you've said goodbye to paper invoices and automated approving them—the next step is automating your B2B payments.
Payment automation makes paying your suppliers and vendors a simple and easy-to-track process. Our portal, OnPayConnect, enables your team to make payments from anywhere and track your cashflow at all times. The best way to use it, is by issuing electronic payments you can track.
Not sure what your electronic B2B payment options are? Check out our free eBook today!
With our unique approach to payment automation you can:
- Authorize payments by vendor and by payment type
- Eliminate processes that are slowing you down
- Receive real-time updates on payments processing
In particular, virtual cards are the main feature you should be taking advantage of. Virtual card payments offer many benefits, such as high levels of security, cash rebates, lower costs than paper checks, and the ability to streamline your AP processes. Technology has transformed the way we do everything—making things easier and taking much less time.
Virtual Cards: What Are They and How Do They Work?
Many businesses today are leveraging technology to manage their finances. With accounts payable, you will find that technology can make your process inexpensive, faster, and more convenient, while providing a high level of security to your company.
Virtual cards are one way of using modern technology to make your AP team’s lives easier. They are a form of electronic payment.
When issued, each v-card is a randomly generated 16 digit credit card number. It is created solely to pay for a transaction or multiple transactions at a predetermined dollar amount, without a physical card. Each virtual number will expire after the payment is processed by the supplier. It can be used with any vendor that accepts credit card payment because for their purposes—it’s the equivalent of a credit card payment.
Why You Should Be Using Virtual Cards
Let’s go over some of the perks that come with v-card payments.
First, they have a high level of security, serving as a buffer between your actual credit card account number and the vendors that you work with. Consequently, you won’t have to worry about someone intercepting your payment, running up fraudulent charges, or your supplier having an open line of credit to charge at will.
Second, It’s much less costly to use a virtual card than it is to print and mail paper checks. The process is paperless, which eliminates the cost associated with check stock, envelopes, postage and labor hours required for manual processing.
Virtual cards generate cash rebates, which make a tremendous impact on your cost. In some cases the v-card program pays you back much more than you ever spent issuing check payments. Some providers pay rebates on a quarterly or annual basis (however, we suggest you choose a monthly payment program). The amount of cash you earn is tied dollar-for-dollar to the virtual card payments you make. The more payments you make, the more cash back you will earn.
Enrolling Suppliers is Easier Than You Think
Not sure if your suppliers and vendors will go for it? Don’t worry, enrolling is easier than you would think and our expert team will handle the onboarding process for you.
Having a positive relationship with your vendors is key to success in the modern world. There are benefits that make it a win-win situation for them including:
Higher security on payments
No more late or missed payments
Process is paperless and can be handled remotely
Enrolling suppliers to accept virtual cards requires little to no work from you—most providers offer vendor/supplier enrollment programs. They often feature an in-house team to create custom enrollment campaigns, contact your suppliers, and even help with special projects.
There’s never been a better time to advance your finance department into the future and begin generating revenue! Particularly since the Construction Leadership Council (CLC) has warned that the unprecedented materials shortage could continue well into the second half of 2021.
Ready to get started? Talk to a member of our expert team today. Otherwise, here are some related resources.
- AP Automation Solutions & Best Practices Guide
- AP Automation for Construction Companies
- Virtual Card Adoption Strategies for AP
- Accounts Payable Automation Strategies for Success
- The Human Side of AP Automation
- 4 Virtual Card Myths (and the Surprising Truth)
Get more information on AP automation solutions.
Originally published on July 29, 2018. Updated for content and quality on June 24, 2021.