Construction Industry & Bankruptcy
Every year thousands of construction businesses go bankrupt due to the snowball effect of late and delayed payments. According to constructconnect.com in just 2 years there was a decrease in companies at roughly 30%. There is absolutely nothing easy when it comes to getting paid in this industry. It is not as simple as submitting an invoice, and then getting paid. There’s plenty of back and forth, confusion and waiting. Prolonged waiting periods can force companies out of business alone.
Despite the fact that these construction companies could be very organized and diligent with their own finances, it still comes down to them relying on receiving payments for the work and services done. Some companies wait over 90 days or longer to get paid. Picture working on several projects, while waiting for cheques from these jobs, and you still have to pay workers, employees and pay for materials. Continuing this way provides no benefit to an industry that needs change. But what’s the cause?
Pretty much everyone is in a pay when paid situation, a lender needs to pay a developer, a developer needs to pay a construction manager and then a construction manager needs to pay a trade contractor. In most cases, work must also be verified by consultants, which layers onto the back and forth, creating more complexity.
Overall the industry remains bogged down by manual inefficiencies, access to the right information and lack of transparency. And payments aren’t released without certification and/or approvals. Sounds complicated right? That’s because it is.
At Harbr, we are focused on creating the best route to prompt payments for the construction industry, automating trade invoices, and streamlining the accounts receivables process. Fast approvals is just one way Harbr helps trades and construction companies get paid faster.