Industry News

How to move your construction business from checks to online payments

Kristen Frisa

Technology offers construction companies amazing opportunities to become more productive, more efficient, and even improve the way they build. Similarly, online payment processing has the ability to help move money faster to keep construction cash flows healthy and suppliers happy.

Despite the clear advantages of adopting technology into construction businesses, change is not easy.

Many companies put off adopting new technologies because they’re afraid it will take too much time to train employees on the latest solutions or that workers will just resist the change. Others are worried that new software won’t work well with systems already in place in the company.

Don’t worry: technology is not out to get you. This article will discuss some of the traditional ways of making payments in construction, how online payment processing can move your business forward, and how a company can overcome the challenges of adopting digital solutions.

What are the old ways of paying?

So, what are the problems with the old ways of doing things that necessitate a change? Construction has been a successful industry for a long time, so why can’t construction go on using its legacy payment systems?

Sure, checks and wire transfers have been successful in achieving what they were meant to do – moving money from one account to another. But getting a job done is not the same as getting a job done well. As you’ll see, there are significant drawbacks to the old way of doing things.

Check

Paper checks still represent over half of business-to-business payment value, but savvy businesses know they are no way to pay the bills.

The administrative costs of issuing, signing, and sending checks are astounding, so it’s surprising checks have held out so long while most pen-and-paper systems are long gone.

Check payments represent serious security risks, too. Almost half of all the world’s fraudulent payments are associated with checks. Even beyond their fraud risk, they’re too easy to lose track of.

ACH Bank Transfers

ACH transfers have been around for a long time. They are secure methods of payment, and offer the advantage of being able to transfer money at a distance – no in-person signing or delivery required.

Wire transfers are pretty tricky to set up, though. The receiving company has to provide all its banking details, and the transfer is arranged through a bank. This process is time-consuming and error-prone. If a single number is off, the whole payment can be delayed or even lost.

ACH transfers can be pricey, too, costing up to $65 per transfer if it’s an outgoing international transfer. Over time, these costs could be prohibitive with frequent or high-dollar transfers.

A better choice

Luckily, the digital revolution has provided better solutions than any of these payment options. Online payment processing is easier to set up, faster, and more cost-effective than legacy payment systems and solves many challenges that come with making payments.

Unlike checks, online payment processing can securely move money directly from one bank account to another without the administrative headaches of issuing, signing, and sending a paper check. Then payments can be tracked in real-time for ultimate peace of mind.

Challenges of moving to online payment processing

Still, when switching from one way of doing things to another, there are often some growing pains involved. Sometimes these concerns can be enough to stop companies from trying.

Here are some of the main challenges of moving to an online payment system and some ideas to make them less… challenging.

Challenge: Getting your company on board

In order to begin a new method of, well, doing anything, you have to get some buy-in from your employees. After all, you’re introducing a whole new system when the old system was getting them by just fine!

Solution: Find support and go for it

The best thing you can do to get employees on board with a technological shift is to forge ahead and try new solutions. You may encounter some resistance, but trying is the only way to move forward.

Once one or two of your staff successfully switch to a new solution, they will endorse it enthusiastically and become champions of the new process.

To ease this process, start with a solution that’s fast and easy to set up, and offers plenty of support to new customers.

Challenge: Analyzing cost-benefit of a new process

The first question that comes to mind with any new solution is whether its benefits outweigh the costs. It can be tricky to parse out the actual expenses of your current system and compare it equitably against a new one.

Solution: Compare payment methods head-to-head

Construction costs are not small potatoes. You may be moving thousands or tens of thousands of dollars in a single transaction. Know what you don’t need? Hidden costs and hours of administrative work each month.

For instance, the cost of writing a single check can reach $70 when you consider expenses related to printing, distribution, and materials.  Think of all the related costs related to producing one:

  • Envelopes
  • Printer ink
  • Postage costs
  • Reconciliation fees
  • Labor costs to address and stuff envelopes
  • Labor costs to record checks amounts in accounting software

In contrast, MazumaGo payments can be set up with a few mouse clicks, with none of the extra materials and labor costs. Still not sure? Here’s a more in-depth breakdown of the true cost of check processing.

Challenge: Getting clients and vendors on board

For businesses to send or receive online payments with one another, both parties must use the digital payment system, and some may be more willing than others to be your trial case.

Change can be unnerving, especially when it has to do with money. Luckily, paying suppliers and subcontractors through MazumaGo is fast and simple, so your partner companies won’t have to provide you with lengthy banking information to get started. All they need is an email address.

Solution: Slow and steady

It’s so exciting to move your business forward, so it’s understandable if you’re tempted to try to transition all your operations to online payment systems at once. However, moving too fast can be a recipe for frustration.

Try instead to pick one client who’s willing to make the switch. Once your first clients are fully onboarded, you will be much more comfortable with the process and able to spread the good word about how much easier payments have become!

Pick an online payment provider that knows your needs

Not all online payment processors are going to be equal. MazumaGo has tools created specifically for construction companies, with no transfer limits or holds on funds, so you can get paid faster and keep the cash flow going to run your business.

It’s super quick to get started with MazumaGo, with just a short registration process (it’ll only take you about 10 minutes). Then you can get started saving on your business’ payment processing.

Change is never easy, but by moving slow, choosing your new solution well, and moving forward with confidence, you can reap the benefits of online payment processing with minimal disruption.

Interested in taking the first step? Sign up for MazumaGo for free now.

Make business payments move.