To finance slow payments, the estimated overhead included in subcontractors’ bids is 2.75% and 5.81% for general contractors. This year’s report uncovered that slow payments to subcontractors and general contractors will create $136B in additional costs for the US Construction Industry in 2021.
Construction Lender Efficiency Tip #3 – Setup Automated Checks for Compliance and Data Discrepancies
It’s happened to you. It’s happened to your friend. It will probably happen to you again. You get sent something with inconsistencies, missing documentation or typos. Those issues require you to start over and make you paranoid the next time you get a document. You spend even more time checking documents because you’re worried about errors that expose you to risk.
First off, hats off to you for meticulously checking your data. Second, wouldn’t it be nice if you had a process for automatically catching those errors? If you find the same errors happening frequently, set up automated workflows to check for your custom rules. If you implemented a construction loan management platform after reading step 2, great. It should allow you to configure custom rules and then automatically run all the checks for you. If your platform doesn’t let you do that, it might be time to look for a new one (we happen to think Rabbet is pretty great).