Procore Introduces Tool to Speed Up Slow Construction Payments

Construction management software provider Procore has launched a tool it says will help solve a perennial problem in its industry: slow payments.

Procore Pay, built in partnership with Goldman Sachs, is a payment functionality built into the Procore platform, the company said in a news release Tuesday (Nov. 8).

Due to launch next year, Procore said this tool helps companies by “reducing payment friction by expediting invoice review and providing payment options powered by Goldman Sachs.”

The tool also helps businesses save time by reducing friction around data entry, integration and payment processing, while also streamlining lien waiver collection with the help of an automated lien waiver exchange.

In addition to Procore Pay, the company is also introducing Procore Connect on Drawings, which allows teams to connect to products “in other stakeholders’ accounts and synchronize data to reflect the most up-to-date drawings.”

Digitization and AR automation could go a long way toward helping construction companies maximize their efficiency and lower their costs, according to the “Working Capital Playbook,” produced by PYMNTS in collaboration with YayPay.

Without automation, the construction industry loses $100 billion annually, thanks to delays stemming from the aging infrastructure used to transfer payments and companies’ slowness in documenting, approving and communicating payments. As a result, nearly half of all construction firms wait up to almost three months to receive payments, according to the report.

In fact, the commercial construction industry has the longest days sales outstanding cycle of any mature industry, Gregg Lund, CEO of the construction financing company Struxtion, told PYMNTS earlier this year.

“That’s the days between when a subcontractor invoices the general contractor and the general contractor pays them,” he said.

“In the value chain of material suppliers, [subcontractors], [general contractors], owners, banks that the owners may use to fund their projects, [subcontractors] are the smallest player in the value chain and essentially they front all of the working capital expense for really that $900 billion worth of commercial construction put in the ground,” he added.