Winning work and getting paid: 3 proven tips that give construction firms the edge

Over the past five years, JP Morgan Chase has been tracking the financial lives of more than one million small and medium enterprises (SMEs), including construction and trades.

While the importance of cash flow will be familiar to anyone who runs a small business, it discovered something which is less well known.

The companies that transition to regular cash flow patterns achieve faster growth.

The research showed that ‘organic’ growth firms were overwhelmingly the largest contributors to aggregate revenue growth.

And by ‘organic’ that means companies that attain growth out of operating profits rather than through the use of external financing.

The key it seems is not raising funds but managing the flow of cash into a business and limiting time spent away from that old favourite of delighting the customer.

So, what is the best way to manage that transition?

Dealing with late payments

Many construction-related businesses recognise the perils of a thin cash buffer.

Most of us will have been unsurprised when Sage research revealed that 17% of all payments owed to SMEs are late.

That adds up to billions of pounds each year.

Late payments put businesses at risk yet hidden behind overdue payments are other roadblocks which soak up staff hours and stymie growth.

Getting invoices prepared, reconciled with what work has been completed and out the door takes manual effort and longer than it should.

Time really is money and cash flow is the lifeblood for those of us in the trade.

At QuoteOnSite, our clients have told us that they use a mix of software when organising quotations, proposals, invoicing and client communications.

Within the same team, there will be some colleagues using email, some Word docs, some Excel, and no one will have a clear overview of what is happening in the sales pipeline.

And when you are caught up chasing quotations and payments, without quite noticing, it impacts on the hours your teams have to win new work.

For example, one client told us they realised their site managers were spending on average a day each month with their accounts team checking the status on billing for each job.

So, am I here to tell you that there’s a better way, a simple way to improve cash flow, cash management and win rates? Yes, I am, but only because I’ve seen these three hacks work.

1. Make clients do the heavy lifting

In construction, we knew that time creating quotations and issuing accurate invoicing meant less time for owners to work on sites and carry out surveys.

A job such as a home extension or loft conversion is detailed but as with many construction jobs, creating quotes from scratch also involves repetition.

So, we looked at how a customer portal could make a difference.

It allows clients to pick their own template related to their house type and fill out their customer portal page with the requirements they want.

The result was twofold.

One company told us ‘half the job is done for us prior to booking a survey’ but there was also an upswing in commitment from the homeowner.

Once people can visualise what they will buy – whether the tech allows you to add colour swatches to a sofa, customise the trim on a car or choose more expensive windows for their extension – they are buying in.

When those choices are backed by tech which makes it easier for people to place order and pay, it can transform sales.

One construction company that made the tech transition told us: “We reduced our time quoting for each job from two hours down to 30 minutes by templating the breakdown of the majority of our services.

“We also saw a reduction in the time we spent changing the content of our quotes, explaining our services and amending customer options because our quotes go out the door in a much more complete and accurate state.

“This saves the team a huge amount of time each week and with the ability for customers to make their own choices, they are confident that they will get the results they are looking for.”

Takeaway

Allow your clients to self-serve. Give them more control over a process and allow them to make what they want from you more bespoke.

Not only will this save you time, it’ll make your clients (and prospects) more likely to commit.

2. Make it easy for clients to spend, spend, spend

When you are focused on your business, it’s sometimes easy to miss ‘delay points’ that are slowing down or preventing people committing to buying from you.

As soon as your clients have reason to put off actioning something where there are more than two steps involved, it’s not surprising that they put the task to one side.

It is all very human.

Think about the times you almost bought something or made a donation to a cause but didn’t as it meant you needed to enter your credit or debit card details.

If you want a task to be completed, strive for simplicity. Ease is key to why PayPal has grown from one million users 20 years ago to more than 360 million today and why it’s a payment integration option in Sage Accounting.

Takeaway

Add ‘Pay Now’ buttons to your invoices to allow for instant payment.

This is a sure-fire way to make life easier for your clients to commit – and it’s a straightforward way to cut down on the time your team needs to spend manually chasing payments.

3. Speed is of the essence

Being responsive is a must today.

When we initially set up our company, we imagined that our solution needed to make sure that companies could respond quickly to enquiries, straight from our website, with templates that look professional and are accurate – by accurate I mean we made sure price lists and any discounts integrate easily with the templates.

It was only when we got client feedback that we realised that the solution was also eliminating invoicing and payment bottlenecks and that it was unlocking hidden value.

Having a dashboard as the single source of truth makes the progress of all quotes clear to teams and management.

So, as well as quotes going out, any client queries can be seen, answered and clients could then ‘accept’ the quote, with e-signatures, all in one place. Crucially, and with a turnkey integration with Sage, invoices can be automatically generated too.

This has proved a gamechanger for many, helping clients transition to consistent and timely payments.

As well as moving payments along, it was reducing other inefficiencies.

Clients could request other service and click acceptance without a ‘to and fro’ of emails. There was no need to spend time working with central finance teams to check what work had been completed and what could be invoiced.

And it makes it easier to forecast revenues and resourcing requirements.

Takeaway

Technology is your friend here. Put manual processes to one side and use a good accounting software solution that allows you to create professional invoices.

This will help your firm look good in the eyes of your clients. And if the invoices can be automatically generated, that will save your firm a lot of time.

Final thoughts

In conclusion, we know technology should be making breakthroughs for all companies.

Research by Sage found that the firms that adopt digital tools save up 27.6 days a year due to reductions in admin burdens, those alone represent an average cost saving of £17,000 per annum.

When software solutions are integrated into your business, you’ll find that your time is freed up.

And that means you’ll have more headspace to focus on what matters.

More time to get things right for your customers.

Time to dream up the next big project for your firm.

Time to grow, organically, every year.