5 Profits of Automated Invoicing for Construction Contractors

In today’s ever-evolving world, it’s no surprise that many companies are searching for ways to improve their finances by boosting productivity and reducing costs. Even construction contractors are hopping on board the productivity train, aiming to improve efficiency and cut down on operational expenses.

One critical factor that can affect a company’s cash flow is the accuracy and promptness of invoices sent and received. The accounts payable team holds the keys to managing and executing invoices, whether they’re for paying suppliers or clients for a completed job. If invoice management isn’t up to snuff, it could end up costing the company big time.

That’s why it’s crucial for companies to keep track of invoices and ensure they’re being properly managed. It’s not just about growth and expansion—it’s about avoiding potential financial losses.

When it comes to processing invoices, it’s not just a matter of data entry; it takes a skilled accounts payable team to get the job done. However, when a company deals with a large volume of invoices, manual tracking can lead to human errors, including mistakes in details, delayed processing times, and more.

That’s why many companies are turning to automation to improve efficiency and productivity. In this article, we’ll explore the benefits of automating invoice processing, specifically for construction contractors.

What is Automated Invoicing?

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Sorting and arranging invoices is no walk in the park, especially for a construction company’s accounts payable team. It’s a necessary task, but it can be quite challenging and time-consuming. A recent survey revealed that 30% of accounts payable teams find invoice processing to be very stressful.

That’s where automated invoicing comes in. This cutting-edge system utilizes machine learning and digital technology to process invoices quickly and efficiently, making the invoicing process a breeze.

How does Automated Invoicing Work?

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Automated invoicing helps reduce manual processes and fully handles the invoicing process for the company, including sorting, responding to invoices, processing payments, tracking invoices, etc.

All account payable teams and budget managers are given access to the information in the software and notified whenever a new invoice is added and needs approval for further processing. This eliminates the time and stress it usually takes to handle these entries manually with the accounts team.

The automated invoicing process is usually a three-stage process, although it might vary depending on the specific platform or automated software in use. These include scanning, extraction, and processing.


This is when the software scans through the systems to track invoices sent or received. Once an invoice is detected, including those sent by email, it is added to the software, where the processing of the invoice can automatically begin.

Since most suppliers send invoices by email to the accounts department, the software scans the email of the company to check for any incoming invoices and adds them to the software.


The details of the transaction are then extracted from the invoice to be processed for payment. This software uses OCR (optical character recognition) to capture and extract important information about the supplier such as the business name, address, amount payable, date, pricing, details of the product or service, etc.

These details are needed so that they can be added to the software and sorted for easy recognition and identification.


The order from the invoice is then evaluated and scanned for vital information. The software compares the data from the invoice to previous invoices sent to the company from the same supplier to see if they meet requirements, including detecting the purchase order to match the data.

After all, the details are checked to see if they meet the requirements, and the payment details are then recorded for further actions and processing. The software usually records the payments with the matching orders to create a record.

Problems Associated with Traditional Invoice Processing

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The traditional method of sorting and processing invoices can be a time-consuming and stressful task for the accounts payable team. This process can take a couple of days or even weeks, depending on the volume of invoices received. As a result, valuable time that could be used for important business tasks and activities is wasted.

This approach not only affects the team but also the business as a whole. When a supplier sends an invoice, the accounts payable team must ensure that all necessary details are accurate, including the purchase order and other essential information, before processing it. However, manual processing of invoices can lead to errors, such as incorrect data entry and delayed processing, which can impact the supplier’s payment timeline.

Furthermore, this approach limits the team’s ability to focus on value-added activities, such as cost-saving strategies and improved supplier relationships, which can ultimately benefit the business. Thus, there is a need for a more efficient invoicing system that can streamline the process and eliminate the risks associated with traditional invoice processing.

In some cases, suppliers may forget to add vital details, such as the purchase order or other important information, when sending invoices. When this happens, the accounts payable team must forward the invoice back to the supplier for correction, causing delays and unnecessary friction between the company and the supplier. Statistics show that 30% of companies are not paid within agreed terms.

Apart from this, traditional invoicing processes are plagued with other problems, such as human errors and cyber security threats, especially through email phishing.

Benefits of Using Automated Invoicing for Construction Contractors

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I. Time-saving

Automated invoicing can bring numerous benefits to construction contractors, and one of the most significant advantages is the amount of time it saves. Sorting and processing invoices manually can be a time-consuming and frustrating task, but with automation, the process can be streamlined and made more efficient.

By implementing automated invoicing, construction contractors can focus on more important tasks and activities, rather than spending time on tedious invoice processing. The software can process payments faster, improving communication and relationships with clients and suppliers. When invoices are processed quickly, suppliers can be paid on time, which builds trust and strengthens relationships.

II. Improved Financial Management

Automated invoicing is a game-changer when it comes to improving financial management in construction companies. One of the major issues faced by most construction companies is managing their finances, which can be a daunting task. Many business owners have admitted that managing their accounts is a significant challenge, mainly because they have little or no knowledge of accounting.

However, inadequate financial management is also a major reason why many businesses fail. Implementing automated systems can help companies properly manage and track their inflows and outflows, improve cash flow management, track and monitor payments, improve budget control, and more, all of which contribute to improving the financial efficiency of the business.

For example, instead of manually creating estimates, contractors can use contractor app for estimating to fast-track and automate the estimation process. This results in more accurate financial records, better decision-making, and ultimately, improved financial stability for the business.

III. Improved Communication and Collaboration

One of the many benefits of implementing automated invoicing is the enhanced communication and collaboration it brings to the business. The software is designed to track and evaluate each invoice, ensuring that all details are accurate and meet the required standards. This process improves transparency within the business, eliminating any potential errors or discrepancies that may arise.

In cases where errors or omissions are detected, the software automatically flags them, and the budget managers are immediately notified within the platform. This way, necessary actions can be taken to rectify the issues, saving time and resources.

With improved communication channels, clients are notified earlier of any errors or discrepancies in their invoices, allowing problems to be solved quickly and effectively. This also helps to build trust and loyalty between the clients and the business, improving customer satisfaction and retention rates.

IV. Seamless Integration with Other Business Tools

One major advantage of automated invoicing is its ability to integrate seamlessly with other software tools on the same platform, providing a more efficient and streamlined workflow. By integrating with other tools, the contractor can handle most of the operational tasks on one platform, and data can be easily shared across different platforms for more accurate tracking and reporting.

For example, an invoice automation tool can easily integrate with accounting software to produce better data analytics, increase productivity, and improve overall efficiency. With a more integrated system, it becomes easier to track and manage important business data, saving time and resources while enhancing overall performance.

V. Enhanced Security

Storing paper invoices in the office can be cumbersome and risky, as they may take up a lot of space and are prone to damage. Misplacing them could lead to financial losses for the company.

With automated invoice processing, all invoice records are securely stored on the platform, where they can be backed up and recovered whenever necessary. This significantly reduces the chances of cybersecurity risks from phishing attacks, which are commonly carried out through email.


The benefits of implementing an automated invoicing process for construction contractors cannot be overemphasized. It saves time, improves financial management, enhances communication and collaboration, and enhances security. Construction companies can take advantage of the latest technology to streamline their invoicing processes and ultimately improve their overall efficiency and profitability

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