Demand is high, opportunities abound but even the most savvy trade contractor likely struggles with workforce shortages, supply chain challenges and maintaining productivity. It’s an uncertain environment where missteps can be costly.
Here’s three ways that subcontractors can reduce business risks in 2022:
- Optimize Your Financing: Debt and equity financing are common forms of financing for most contractors. In these times where getting paid in a timely manner can be the difference between operational success, consider other forms of working capital. One increasingly common financing option is invoice financing, a financing option that builds on your company’s biggest asset: your invoices. Constrafor’s Early Pay Program (EPP) is an affordable credit option for subcontractors that leverages an owner or general contractors credit position to pay subcontractors faster. EPP can reduce traditional financing, diminish financial stress and help subcontractors better manage working capital. Once your invoice is accepted by the general contractor, Constrafor pays the invoice immediately. No more 30, 60 or 90 waiting periods.
- Certificates of Insurance: Maintaining certificates of insurance (COIs) to submit to general contractors can be a tedious and time consuming back office task. Too often, companies rely on spreadsheets to manage and email to send these all important documents. Manual errors and past expiration dates are not uncommon—but are detrimental o any subcontractor business. A COI management tool automates the COI compliance process. With AI-enabled tools, documents are auto filled, thus eliminated considerable amount of manual entry, notifies the responsible parties when expirations are near and finally automates the communication with general contractors. No more emails and spreadsheets.
- Refine Your Contract Management Strategy: Contracts are increasingly complex, particularly in these times with addendums and provisions. Are your most current contracts readily available? Are you able to track changes and receive notifications of new versions? Are you using digital signature technology? A streamlined contract management solution ensures a single source of truth for all contract documents. It stores templates and documents for easy access, facilitates safe and secure signatures, tracks changes while maintaining a versioning history, and it can integrate with invoice management.
Optimizing any one of these areas – financing, COI and contract management practices—can improve bottom lines and assure success in the coming year. To learn how Constrafor can help streamline your back-office tasks and reduce risk, schedule time with an expert here.