How improved visibility ensures better financial management
Transparency is key in order to maintain positive business relations and to ensure important payments are made without delay. For this reason, a robust but intuitive payment management system, such as Open ECX’s WebContractor, which keeps contractor and subcontractor finances above board and provides both parties with visibility of progress towards payment.
Maintaining healthy business operation is at the top of every company’s agenda, and, in the past year, the construction industry has seen a great deal of change in terms of payment practices and the call for evidence. This change, in part, was accelerated by the collapse of Carillion in January 2018 which shocked both the construction industry and the UK at large. After investigation, the construction giant was known to have paid subcontractors up to 120 days late.
Undoubtedly, such an event has had huge repercussions on the taxpayer, Carillion’s supply chain and its staff. Carillion’s collapse has even, in some cases, affected the amount of money UK banks loan to construction companies perhaps in fear of a similar occurence.
It goes without saying that an event like this cannot happen again. Even though Carillion’s collapse is a stand-alone case, it still begs several questions on how and why payments were so late.
But, moving forward, it is important to identify key solutions to prevent similar events from occuring. All contractors desire a risk-free environment in which their payment processes are rigorous, safe and reliable; allowing contractors to be more organised and efficient with their payments.
It is crucial to implement innovative solutions which ensure payments can be traced, recorded and accessed accordingly. Open ECX’s WebContractor provides end-to-end management of applications for payment in construction, ensuring complete transparency and accessibility across the supply chain. It is a cloud-based portal for subcontractors to upload payment applications so contractors can manage payments more effectively, anywhere and at any time! This portal proves it is an efficient alternative to submitting paper-based documents or sending applications for payment by emails.
Using a system which ensures better visibility of payment applications safeguards businesses and removes risks or threats such as litigation, and timely and accurate submission of payment applications means faster processing of these by contractors. In essence, a solution such as WebContractor removes all the loopholes that a company such as Carillion were able to eschew. Overall, it makes for an honest, healthier and more productive financial system beneficial to all parties involved.