Why construction companies need to upgrade their financial tools

Business development has evolved in recent years. Nearly every industry is seeing sweeping changes in how they handle expenses, connect with clients and manage revenue. Brand new financial tools are helping businesses better manage their operations at every level. Construction is one of the few industries that has yet to catch up to these changes and implement these tools. This presents a challenge for both companies and the economy alike. Construction is a multi-billion dollar industry responsible for creating the world around us and contributing greatly to GDP. In some ways, the health of the construction industry is tied to the health of the economy. If construction doesn’t catch up, there could be serious financial friction in the future. 

The core of the problem comes down to one word: technology. When people hear this word, a lot of mistaken assumptions come to mind. The average person may think of confusing lines of code, complex machines, and robotic tools that are more trouble to learn than they’re worth. It’s this assumption that’s caused construction companies to lag behind in adopting better financial tools. 

In reality, technology is a simple, intuitive concept. It’s a tool. The same way a car, a light switch, or the phone in your pocket is a tool for a job. When you avoid technology, you’re avoiding better tools. In the same way, that better equipment leads to safer project sites, and better work, financial technology improves your business at every level. 

It’s time to change the narrative surrounding “technology” in construction and discuss what’s really at stake here. This isn’t about investing in technology, it’s about purchasing the best tools to drive profitability, improved efficiency, and better business outcomes in construction. Let’s go over why construction companies need to upgrade their financial tools, and why “technology” is no longer optional in the industry. 

An outdated tool is a broken tool

One of the main arguments against bringing in new financial tools comes from a common catchphrase: If it ain’t broke, don’t fix it. If the company is still operating effectively, acquiring bids, and executing jobs well, why bother changing the process? This line of thinking may work in some instances, but it misses the full picture. It doesn’t account for the opportunity cost that comes from neglecting new opportunities. There’s a simple analogy we can use to illustrate this problem. Imagine there’s a transport company that only moves cargo by using horses and carriages. Horses and carriages aren’t “broken” in a technical sense, but they’re outdated, less effective, and prone to many problems that can be avoided by using a car. The gap between the two options is so wide that there’s almost no difference between “broken” and “outdated”.

Spreadsheets are undeniably the horse and carriage of construction finance. They’re time-consuming, resource-intensive, error-prone, and laborious tools to use. There’s even a term associated with the long hours spent working on spreadsheets: Excel Hell. While these sheets will always be around in some fashion, they shouldn’t sit at the core of every business process. Many businesses are now using financial automation tools as their go-to for processes Excel used to manage for them. Whether it’s automated forecasts that calculate all possible curves, or cloud connectivity that synchronizes your documents, many tools should be preferred over Excel for your various financial processes. From now on, companies shouldn’t ask themselves if Excel is broken. Instead, they should ask if there’s a tool that does it better.

You’re already investing in technology

Businesses often talk about investing in technology like it’s a huge step to take. It’s as though purchasing a new tool represents a change in company policy, or a whole new initiative to “invest in tech”. While it’s useful to discuss business initiatives, this type of dialogue isn’t an accurate way to discuss technology. If you’re reading this article on a work computer, your company has already invested in technology. If you have a work email address, a digital communications system, or a company login, you’re using key technology investments. Anything that isn’t pen and paper counts as “tech”. When discussing any new tool, it shouldn’t be about the broader concept of “technology”. The tool should be evaluated based on the value it provides, how well it performs its function, and the ROI of the purchase. It’s the same way construction companies decide what machinery to purchase, what field equipment to use, and which suppliers are your go-to. 

Almost everyone agrees on the principle that businesses need to invest in the right tools to provide the best services. However, your financial teams likely don’t have many to get the job done. They’re handling accounts payable, forecasting, allocation, and change orders through a mostly manual process. This is the equivalent of trying to dig a hole with your bare hands. It’s doable but far less effective than doing so with a shovel. Financial automation can act as more than just a shovel for your teams — it’s an excavator. By moving away from an aversion to “technology”, companies can start to equip their financial teams with the best tools for the job. This isn’t just a metaphor either. DSI has automated over 10,500 invoices using AP automation. Catamount Constructors has an automated, rolling forecast that stays refreshed daily. Companies across the industry are showing off what a financial team equipped with the best tools for the job can achieve. It’s not a matter of if your business has invested in technology, it’s a question of “how” it’s done so. 

Identify the tools for the job

Now more than ever, it’s clear that construction companies need to invest in the right financial technology to stay competitive. However, taking initiative is only the first step. It’s important to identify the best tools for your financial teams and provide your business with the right tech stack. For construction companies looking to invest in a tool designed for their needs, they can look to Briq.

Briq is a financial automation platform built to help construction companies run a better business. It isn’t just a single tool, it’s the toolbox for all your construction finance needs. If you’d like to learn more about what Briq can achieve for your business, speak with our experts and get a live Briq demo at briq.com/demo.