To build faster payments for construction, Nvoicepay teams with Viewpoint
Viewpoint's Henry Ferguson has heard the arguments against digitization firsthand, when checking with advisers who take the temperature of people in the construction industry.
"When you say automation, for them it means a lack of control. And they want to control these processes," said Ferguson, director of strategy partners for Viewpoint, a Portland, Ore.-based software company that specializes in construction. Viewpoint sells programs that manage enterprise resource planning for clients that mostly supervise building projects.
But in keeping control, construction companies give up speed. They must wait for payments for their work, or parts of their work, while also waiting for payments from their own suppliers. Attempting to close that gap, Viewpoint on Tuesday unveiled a collaboration with Nvoicepay, an electronic invoice company that has been increasing the amount of information available about the details that accompany a business-to-business payment.
"In the payments industry we think everybody is getting an electronic payment," said Karla Friede, Nvoicepay's founder and CEO. "But very few companies have automated all of their payments. There are a lot of companies that are just starting to move in that direction, that are just figuring out the efficiencies."
Nvoicepay will integrate its cloud-delivered payment automation technology to Viewpoint's ERP system. In addition to billing, the technology performs administrative tasks such as maintaining supplier information as it changes over time, removing that process from staff, and supporting an electronic payments gateway that allows the construction company to make payments electronically even if its suppliers don't necessarily receive payments electronically—Nvoicepay handles that conversion.
"Companies traditionally have had to keep track of how to pay different vendors and maintain that information in their account systems," Friede said.
By tying a payments dashboard to an ERP system, Nvoicepay and Viewpoint hope to digitize a construction company's view into incoming and outgoing payments, and execute those payments based on the construction company's liquidity needs. The payment information will also be tied to specific supply levels, such as plywood or Sheetrock.
There's an anxiety for executives at construction companies who fear their incoming payment won't match their outgoing payments, Ferguson said. Ironically, that is what keeps the industry paper-based, since supervising incoming and outgoing checks gives a sense of control.
"This partnership is highly granular in terms of controlling who gets paid, when and in what method," Ferguson said. "But none of that happens without the approval of the construction company."
Viewpoint's clients write about 20,000 checks per year, which Ferguson said adds up given a cost of about $8 to process a manual check. Nvoicepay and Viewpoint's fees are based on how much money they save clients.
"Business payments are harder to automate than retail," said Zil Bareisis, a senior analyst at Celent. "Not only are they even more diverse with industry-specific nuances that have to be addressed, but you also often need to think about an end-to-end value chain for the benefits to flow through."
There is an opportunity to eliminate friction in a specific payments flow, Bareisis said, adding he has argued that payment providers should look beyond standard products to examining flows for inefficiencies.
The Viewpoint collaboration fits with Nvoicepay's strategy to reduce this confusion by performing the heavy lifting that happens between the point where a company in any industry determines it needs more of a certain supply, then figuring out how to pay for those supplies. Nvoicepay has entered into other partnerships to smooth the workflow for supply chain management, purchase orders, receiving, invoice reconciliation and accounts payable.
"Every vertical has some uniqueness to it, but the value is the integration with the ERP system streamlining the process from the ERP to the completion of the payment," Friede said.