As a subcontractor, you will be working on various construction projects, but you have to ensure that you receive payment for your services. Many subcontractors have poor billing processes, making it very difficult to receive compensation.
If you want your contracting business to receive money on time and be profitable, you should streamline your billing process. With a good administration team, you should be able to streamline your subcontractor billing process.
The following is advice to help you do it:
Identify Key Issues
The first step in streamlining your billing process as a subcontractor is to identify the issues that are slowing it down. Simply stated, if you want to fix the issue, you have to get to the root of the problem.
Is there an approval process that slows you down when trying to make orders? Is there a long chain of bureaucracy needed to send invoices to customers? How efficient are communication channels with clients?
The above and other questions will need answers to determine what is slowing down your billing process. You can then eradicate them one by one until your billing process is as smooth as possible.
Use Billing Software
Technology is the best tool at your disposal for streamlining your billing process. A manual invoicing process has many errors and is slow & inefficient. Billing software can help you develop a great invoicing process that eradicates many of the issues you have when it is done manually.
It would be best to find software with a simple, easy-to-use subcontractor invoicing template. It can help you track and calculate billing throughout the duration of a project. You can update it and easily store data, so you don’t have to create a new invoice any time you need one.
Have A Billing Schedule
One of the best things you can do as a subcontractor to streamline your billing process is to have a billing schedule. The schedule will determine at what time of the month you send invoices to your clients.
You should remember that though the construction process is what gets the job done, the billing process keeps the money flowing into the business. You should have specific days for billing and have your team prioritize it and, if necessary, do nothing else on those days.
When planning the calendar for the year, ensure you include days each month for billing depending on project volume and size. It will really help you get your money on time.
Deadline For Document Submission
A vital aspect of construction planning and management is setting deadlines. As it pertains to streamlining your billing process as a subcontractor, you should set a deadline for submitting all critical documents. The deadline should be before the billing process.
To start, you should have standard documents for every stage of the billing process, which makes it easier for your team and clients to meet the deadline. It will also be beneficial to create accurate records removing the need for multiple verifications of documents.
Delegation
It is essential to have the right people performing the right jobs in your team. Once you know the various steps in the construction process, you should assign tasks to team members accordingly. What messes up many subcontractor billing processes is having the wrong people doing the wrong jobs.
For example, the payroll department should be responsible for developing payroll reports and not accounts payable. Billing software may help with the automation of various tasks of the billing process. However, proper delegation is vital for those that have to be done manually.
Setting a streamlined billing process is not difficult, but it has to be done. To do it, you need first to identify critical issues in the process, use billing software, create a billing schedule, set deadlines for documents, and assign tasks to the right team members. Be flexible and review the billing process ever so often to make improvements.