- Workflow – Simple and flexible, yet regulated
- Systematic archiving
- Opportunity to focus on the content of the payment application
- A new level of cost forecasting accuracy
- Immediately manage the expenses incurred on behalf of the contract partner
- A unified system of guarantees
- Allocate invoice with just one click
1. Simple and flexible, yet regulated workflows
The flow is started by the General Contractor who fills in the data for the first payment application and appoints involved parties. This application is then sent to the Subcontractor for review and confirmation. Following payment applications can be started either by General Contractor or Subcontractor.
If one party has drawn up the payment application, the other party will receive a notification about it; simultaneous preparation of the payment application by two parties is excluded. Also, it is not possible to draw up the next payment application until the previous payment application has been approved by both parties.
2. Systemic archiving
When processing payment applications for completed works, there are very often situations where the payment applications “disappear” in correspondence and are therefore not processed in time, or payment applications that have already been signed cannot be found because they were not saved in the right place during the procedure.
The online payment application functionality offers a solution for that!
By using the online payment application functionality, all payment applications are located in one place; it is easy to see if the payment application has been opened, changed and who needs to perform the next action. For every activity that one party performs, the other party receives a notification. In addition to managing the procedural process it is possible to digitally sign payment applications. Using the online payment application functionality, there is no need to exchange payment applications by e-mail.
3. Opportunity to focus on the content of the payment application
In general, when checking payment applications, presented in classic Excel format, the Project Manager,devotes at least as much time to the mathematical checksas to the content of the payment application. Typical questions that the Project Manager goes through with each Payment application are following::
Have the calculation formulas been changed?
Are the calculation formulas still present or have they been overwritten with numerical values?
Has the previous payment application volume been correctly transferred from the prior payment application?
Is the payment application sum correct?
Does the amount to be paid correspond to reality?
Using the Bauwise online payment application functionality, the formulas are firmly in place and there is no need for additional checking – focus on the content of the payment application, not checking the formulas.
4. A new level of cost forecasting accuracy
All work changes and additional works agreedwith the Subcontractor during the confirmation process of the payment application are automatically reflected in the cost estimate. Why is this necessary?
Analyzing the financial management of various construction projects, it is possible to conclude – if the work changes and additional worksagreed with the Subcontractor are not immediately reflected in the cost estimate, then in most cases the additional cost is discovered in the final phase of the project. By comparing the profit statements of construction projects, it can be concluded:
- Projects where the online payment application functionality is implemented have a very stable profit line throughout the project;
- Projects where the online payment application functionality is not implemented have a stable profit line in the initial phase of the project, but in the last months of the project, the profit decreases significantly.
Example chart. Based on reference projects data.
Bauwise’s online payment application functionality ensures that the cost estimate of the construction works corresponds to reality.
5. Immediately manage the expenses incurred on behalf of the contract partner
More and more agreements are made with Subcontractors, where the final price of the work is agreed upon, but the materials are purchased by the General contractor and their cost is deducted from the contract cost. The complexity of such an arrangement lies in the management of deductible expenses and the time-consuming nature of managing them. It very often happens that the deductible expenses do not reach the Subcontractor’s payment application on time and therefore the General contractor’s expenses for the construction work are higher than they should be according to the agreement.
By using Bauwise online payment application functionality and the invoice approval cycle, it is possible to immediately set the invoice as a deduction for the Subcontractor’s payment application when approving the invoice. In that case, when creating the next payment application, the amount to be deducted has been automatically added to the payment application.By using the Bauwise online payment application functionality, you won’t miss a single expense.
6. Unified system of retainagess
In today’s contractual relations between the General contractor and the Subcontractor, performance and warranty period retainages are used more and more. The implementation of these retainages, however, often turns out to be a serious headache for both project staff and accountants – each contract partner shows the guarantee held in the payment application/invoice in their own way, there is no joint system. This in turn leads to unexpected surprises in cost accounting. The retainage is often completely forgotten. The use of the online payment application functionality makes it possible to set the percentages of both the performance and the warranty period retainage by entering the information once in the contract data., These retainage are then automatically taken into account in payment applications and this ensures that no retainages are left unaccounted for. In addition, this system helps to have a joint system of retainages across project partners, which in turn increases the accuracy of the cost estimate.
7. Allocate invoice with just one click
Classical invoice allocation means that a project identifier, contract number and job code needs to be entered for each invoice line. This means that if there are 10 lines in the document, then 10 expense lines must be created, i.e. the project identifier, contract number and work code must be specified 10 times.
In the online payment application functionality, each work line of the Subcontractor has a cost code corresponding to the budget, which allows you to allocate the linked invoice with the push of a button.