If you ask a builder where the supplier bills are, you will usually get a list of places rather than an answer. Some are in the accounts inbox. Some were handed to the site supervisor and are still in the ute. A subcontractor texted a photo of one. A few made it into Xero but were coded to the wrong job. The rest will surface when the supplier chases them, which tends to happen after the client has paid the final claim and the job has been written up as profitable.
This is not a sign of a disorganised business. It is what happens when a process that worked fine with two jobs on the go is being used to run eight.
Where bills actually fall through
When we sit down with a builder and map how a bill moves through the business, the same gaps show up almost every time.
- The bill goes to whoever ordered the material. That is usually the supervisor on site, who has no easy way to log it and is busy running the job. So it waits.
- The office cannot tell which job it belongs to. The docket says "Smith" and there are two Smith jobs on the books. Someone guesses, or codes it to overheads to sort out later.
- Approval happens over the phone. Before the bill is paid, the supervisor needs to confirm the materials arrived and the quantity was right. That conversation might happen, but nothing records that it did.
- The job is costed before the bills stop arriving. The final claim goes out when the work finishes. Anything that lands afterwards comes straight off the margin.
Process changes that help
You can close most of these gaps without touching your software. These changes cost nothing except the discipline to keep them up.
- One address for bills. Give every supplier and subcontractor a single accounts email and insist they use it. Anything sent elsewhere has to be forwarded to that address by the person who received it, before the end of the day.
- Job number on every order. If the purchase order has the job number on it, the bill usually will too. Most suppliers will go along with "no order number, no payment" once you have told them.
- Hold the final claim until the bills are in. Keep a list of open orders for each job. Do not close the job until each order has a bill against it or has been written off.
These will get a two-job builder comfortably to four jobs. They stop being enough when someone in the office is spending every Friday matching dockets to orders, and the supervisors are forwarding emails from the couch at night.
What it looks like when the software handles it
Builders who have stopped losing bills have stopped relying on people to carry them around. The bill arrives, the system reads it, works out which job and which order it relates to, and sends it to the right person to approve on their phone. Once approved, it goes into accounting coded to the job. The job's cost report is always current, so the margin you see is the margin you actually have.
That is how bill processing works in JACK, the construction platform we built with a builder. Supplier and subcontractor bills are read automatically, pre-filled against the job and sent for approval, with a two-way sync to Xero so the accounts team never handles the same bill twice. Estimating, job management and the cashflow forecast run off the same data, which is why the forecast is accurate. It already knows what has been committed on every job.
You do not need a whole platform to fix this. If you already run jobs in one system and accounts in Xero, the piece in between can be built so bills move from site to approval to accounting on their own. It is usually a smaller project than builders expect. The hard part is working out exactly where your bills go missing today, and that is the first thing we do together.
If you are chasing bills across inboxes, text messages and the ute, have a look at what we build for construction, or tell us where the admin piles up and we will talk it through.
