In the construction industry, decision making is driven by the needs of the field.

When it comes to purchasing power, employees are often reliant on credit cards of various types. If a field worker often has to purchase from a supply yard or a big box yard, it makes sense that they would get a card. Many also get a T&E card. And a fuel card—maybe a multi-purpose corporate card. Some workers may even charge company spending to their personal card and submit an invoice for reimbursement.

Paying with a credit card is the fastest and most efficient way for field workers to meet immediate needs. It is a great alternative to a contracting or purchase order process, which would slow the job down.

In reality, what happens on the back-end is anything but fast and efficient. The accounts payable team ends up running a whole bunch of disjointed, semi-manual processes. That creates challenges around data accuracy, visibility, and control. It can also result in delays in reporting and job costing. That, in turn, leads to delays in billing clients and challenges with cost control.

Today’s fintechs (financial technologies) offer clients streamlined, standardized, automated solutions that make both the front and back-end processes around credit card spending much more efficient. They let accounts payable and finance teams enable field spending without creating a tangled mess for themselves to manage. 

Today’s Clunky Payments

What typically happens now is that cards are issued upon request to meet different needs. Accounts payable teams end up managing four or five card programs. They have to track down all the receipts for each–an ongoing challenge when you’ve got people all over the place.

Then they have to reconcile statements. Each card provider has a different reporting mechanism. One might be in a PDF and another in a CSV file. Ultimately, they have to run several different reconciliation processes.

Then they have to do all the job costing so the bills can go out to clients. And they have to accurately code all that information, assigning it to the right job, and then input it into the general ledger in the ERP system. Since there’s no standardized reporting, there’s probably an Excel sheet or two that they have to maintain in order to properly label and categorize the data.

Each card provider has a different reporting mechanism. One might be in a PDF and another in a CSV file. Ultimately, they have to run several different reconciliation processes.

They also have to keep track of hundreds of plastic cards outstanding. It’s an administrative nightmare—not to mention a fraud risk - as employees churn and as cards get lost or stolen and have to be replaced.

Construction companies also have seasonal or temp workers who need spending capabilities, but typically wouldn't receive a company credit card given their temporary status. That means they’re also handling a reimbursement process for field expenses. 

The expense management process might be somewhat easier for the back office than managing multiple card programs, especially if they have newer expense management technology that can capture and code receipts.

The expense management system may not feed that data into the ERP system, which necessitates more manual data entry. Again you’ll have to manually enter data. And, while there might be an ERP integration with the commercial card provider, there probably isn’t one for merchant charge cards. You might have to manually enter transactions or import a flat file report. 

Yet again, the result is a disjointed manual process. On top of that, you have people out spending money but you don’t know how much and what for until you get their expense report. And asking field staff to file expense reports certainly isn’t easy for them, and making things easier for them is the name of the game. 

The Fintech Difference

What fintechs provide is a complete solution of technology and services that consolidate all your card programs onto one platform. You deal with one vendor, have one administrative tool, and one predictable back-end experience. That eliminates many of the headaches of managing card programs from disparate providers. You have one consistent source for getting cards to people and managing cards outstanding. All of your statements look alike, so you can standardize reconciliation processes. Data is normalized so it’s much easier to create dashboards and do analysis. You have one data source to integrate with your ERP. 

With a much clearer view into your data, and with the time saved on administration and reconciliation, you can begin to optimize field spending. You can improve the timeliness and accuracy of job costing. You can get client bills out on time, thereby improving cash flow.

You can even issue virtual cards with time, category, and spending limits to temporary workers. This cuts down on the number of expense reports field workers need to do, as well as the plastic cards outstanding that have to be managed. It also brings that spending out of its own siloed process into the same card management process. 

Credit cards are incredible financial and productivity tools. They offer working capital lending, rebates, and ultimate convenience at the point of sale. In construction, they’ve become invaluable for empowering field workers to minimize job delays. 

Unfortunately, the efficiency they deliver to the field has historically been at a cost to the back office. The clear choice in construction is always to put the needs of the field ahead of all else. With today’s fintech solutions, when it comes to field spending, accounts payable teams no longer need to choose one thing over the other.

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