Finance

Stay on target: Why you need to control your spend

Spend management — having a means of monitoring, controlling, and analyzing your business costs — is a must have for construction companies. Read on for our top 5 reasons why.

Too busy
to read the article?

We’ll forward it to your inbox.

Spend management is especially crucial to the performance of your construction business. Just think about it: If you don’t know what you’re spending, how can you know if you’re on budget? And, if you aren’t sure of that, can you possibly know how the business is performing?

Construction has a unique degree of unpredictability with little control over variables, and even the most successful contractors struggle to manage cash flow and financing. That makes spend management — having a means of monitoring, controlling, and analyzing your business costs — a must have for construction. 

Why is spend management so important?

When finance teams have access to essential spending information, they can provide relevant insights that can proactively keep projects on track. But if there are information gaps around costs, inevitably some projects go over budget, ultimately leading to lost profits. And when that information is buried for four to six weeks inside a paper trail of various expenses, finance just has to wait until everything is entered into their systems.

I’d like to explain how using Briq to centralize spending and track it in real-time lets you improve your business in five important ways.

1. Better billing through accurate and timely data on spend

If accounting is waiting weeks for costs to be entered into their systems, how are you being reimbursed for it? If you are billing with missing expenses, from a particular credit card or AP invoice, that cuts into your profit. Make no mistake, this can be a sizeable portion of outgoing expenditures that you simply aren’t getting back.

Briq overcomes this by making it easy to track accounts payable, employee expenses, and corporate card transactions (credit and debit) in real time. These spend management capabilities are part of our financial automation platform and they integrate with the rest of Briq and your other technology systems to create a single spend management platform.

2. Controlling spend without creating bottlenecks or adding risk

Tracking miscellaneous spending can be tricky. You know that someone is going to need to fill up a truck out of pocket using the company card, but until that bill comes in, you’re in the dark. Miscellaneous costs represent a huge sum of money to leave on the table. This might happen more than you think. Many contractors pay their subcontractors and suppliers before being paid by their customers, but very few are themselves paid on time.

By automating the financial process, the risk of losing track because of paper-based systems and expenses is gone. There’s less chance of a backlog at accounting, and the time required for accounts payable reconciliation is reduced. Briq provides a comprehensive and automated way to control and monitor these costs — such as corporate cards and other employee expenses — across multiple projects.

3. More accurate cash reporting and forecasting

Accurate cash flow and forecasting can be the difference between the success and failure of your business. Briq helps by allowing you to centralize all your cash spending in one place, providing real-time reporting. Also, using financial automation reduces human error and routine tasks are completed faster.

Briq Cash works with the corporate debit or credit card, prompting the employee for a job code when a purchase is made. Now the gas being used to fill up the company truck is directly and immediately applied to a job, and the expense is available for billing.

4. Improve planning through digital payment solutions

Having real-time expenses isn’t the only advantage of a digital payment solution. Knowing what you are spending on an ongoing basis helps you better predict and forecast expenses, which ultimately allows you to better plan and strategize for success. Management has a clear big picture of spending and can review and act accordingly.

A digital payment solution, like Briq Cash allows companies to easily and quickly predict when or if they will be over or under budget. In addition, it gives you a better understanding of where money is going, and through integration with approval workflows purchases can be made to comply with company policies. (Briq is currently in the process of updating the functionality of Briq Cash through our spend management system. Stay tuned for more news to come!)

5. Better decision leading to faster, controlled business growth

This is the best part. Controlling spend doesn’t just save time and money but also helps you move past your gut and rely on data. This is a path to business optimization and more predictable profitability. You may have sharp intuition for the construction business that’s been honed over decades running the company, but it still can be taken to another level by making those decisions based on data.

Through more accurate reporting and better forecasting around spend, spend becomes sustainable, repeatable, and, most importantly, foreseeable. You can more easily predict the profit you’ll make from a project before taking it on. You can optimize the allocation of your resources so they will provide optimal value through the real-time communication, collaboration, and connectedness a financial automation system like Briq brings.

A new but needed approach to controlling spend

The Briq platform’s ability to deliver in-depth spend management to track and control spend with ease is like nothing the construction industry has had in the past. Adopting it may seem daunting, but if you don’t manage and control spend, you’re flying without a net. Can you really know if you’re driving profits, or if there’s loss around the corner?

If you want to learn more about how Briq can help you manage your spend and grow your business, contact us to set up a demo.