Technology has modernised the management of applications for supply chain payments for forward-thinking M&E contractors, allowing a more streamlined and standardised process and addressing the need for speed
The fast-paced nature of the mechanical and electrical (M&E) sector and the pressure to shorten project deadlines means contractors can’t afford to spend unnecessary time on administrative tasks or on back-and-forth deliberation with subcontractors over valuations and payments.
The challenge: Short contract timescales
Many contractors have to deal with short contract timescales where a need for speed can be a challenge. Hasty estimates make scope creep and variations more likely, which in turn increase the likelihood of disputed valuations, project delays and escalating costs.
Streamlining subcontractor applications for payment is a key consideration for those working in this space, opening the door to improved collaboration and transparency through the supply chain.
Phoenix ME: A streamlined and collaborative approach
Phoenix Mechanical Electrical (Phoenix ME) is an established market leader specialising in the design, installation and commissioning of mechanical and electrical systems across various sectors, including commercial offices, banking establishments, data centres, education, government buildings, residential infrastructure, retail and pharmaceutical laboratories.
Established in 1931, Phoenix ME operates from locations in London, Cambridge and across Europe, with a turnover exceeding £350m.
The company’s core values – innovation, ambition, courage, togetherness, and empowerment – are underpinned by a steadfast commitment to health and safety, outstanding performance and high-quality delivery within a collaborative framework, ensuring client focus and satisfaction.
Given Phoenix ME’s focus on collaboration, it is no surprise the team turned to technology to manage their supply chain applications for payment. Allowing subcontractors and contractors to come together within a single platform, they opted to use Payapps software, a simple way for subcontractors to prepare and submit applications so that contractors can receive standardised application formats across all of their projects.
Ben Findlay, surveying director at Phoenix ME, explains: “Before Payapps, I imagine the same as any other construction company, we were tracking payment certificates to make sure we completed them on time, and our commercial teams were processing lots of paperwork.
“By using Payapps, we whittled down all the transfer of documents via emails and hard copy paper between our construction onsite teams and our back-office teams. Payapps now allows us to track payments and we receive notifications when payments are due. It’s made the process a lot smoother.”
Moving forward, the team at Phoenix ME are about to integrate Payapps with Access Coins ERP. This will allow payment notice information to be posted automatically into Access Coins to create certificates, ready for payment approval, further reducing data entry related to subcontractor payments.
Tom Brooks, head of finance, comments: “Integrating Payapps with our Access Coins ERP system will empower our finance team with visibility over the entire subcontractor payment process, from application submission. We’ll have up-to-date information about variations, those applications that have been certified and those due to be paid. Our ability to predict final account and to forecast and report on cash flow will be enhanced, with no need to re-key information from one system to the other.”
Cilantro Engineering: Driving efficiency and reducing risk
Cilantro Engineering is a leading London building services contractor delivering large-scale residential projects, delivering the design and installation of mechanical and electrical systems across some of London’s most iconic residential developments.
“I would strongly recommend Payapps. It brings a level of consistency and uniformity across our business. It is a user-friendly process that saves invaluable time, which in today’s working environment is our greatest asset.”
Sean Hickey, Commercial Director, Cilantro
Sean Hickey, commercial director at Cilantro, recognised the inefficiencies and risks in their manual application for payment process.
Subcontractors submitted applications in various formats, requiring extensive effort to standardise and verify information that could potentially lead to errors.
Additionally, manually tracking subcontractor compliance status in spreadsheets resulted in inconsistencies and increased risk.
Aware of these challenges, Sean and his team knew a change was necessary.
Cilantro implemented the Payapps platform to automate their subcontractor payment process. Now, all applications for payment are received in a consistent format with all required supporting information.
Data like “payment date” and “previously paid” are self-calculating and remove risk of human error. This is imperative for avoiding late or missed payments, which can be detrimental to projects and, in some cases, can even force organisations to close their doors.
For Cilantro, the consistency in application and payment notice format has not only reduced risk but also saved significant time.
Sean Hickey comments: “We no longer spend time scanning in payment notices, sending to subcontractors, sending to accounts etc. Once a payment notice is approved by the final approver it is automatically sent to all relevant parties.”
Payapps also helps Cilantro reduce risk associated with subcontractor compliance. Payapps makes it easy to track critical subcontractor information, like up-to-date insurance, helping all parties understand and be notified if anything is soon to expire or missing.
Saving time and reducing risk go hand-in-hand. As Sean explains: “I now find myself spending more time reviewing the payment certificates. The layout is much better in Payapps and it is much easier to be thorough with the applications for payment as opposed to receiving Word documents, PDF, Excel etc. Payment applications through Payapps are reviewed in more detail due to the user-friendly layout.”
Join 30% of the Top 30 M&E contractors who use Payapps
Payapps, an ECA partner, is used by a large number of M&E contractors. This includes 30% of the Top 30, for example TClarke, HE Simm, Gratte Brothers and Price Building Services. It’s a fast-paced sector and these contractors can’t afford their projects to be slowed by arduous administration or payment disputes.
For more information about Payapps and how it can help your M&E business, visit payapps.com.
*Please note that this is a commercial profile.
The post The need for speed: How M&E contractors are streamlining supply chain payments appeared first on Planning, Building & Construction Today.
