The industry-standard process for commercial construction invoicing, AIA (American Institute of Architects) billing (sometimes called the percentage-of-completion method or progress billing) first became prominent in 1888 with the publication of the Uniform Contract. This year will mark the 130-year anniversary of the Documents Committee and the 17th edition of standard documents.
These standardized documents serve as the application for current payment as well as the certification that payment is due. This method is supposed to expedite payment and reduce the possibility of errors. But does it?
AIA Billing Challenges
It is well known by accountants how complicated and time-consuming it is to fill out the proper forms correctly and on time. When they aren’t, there may be an additional month-long wait for payment, partial payments may be received, or no payment may be received at all.
Obviously, none of these scenarios are good and any of them may put you in bad standing with the general contractor or project owner, and even damage your company’s overall cash flow management.
Another problematic situation with AIA billing is that it is typically completed in its own software program and then it can take a considerable amount of effort to get the data into a separate project management system. Because it takes a lot of retyping and re-entry of data, it also takes a lot of time. This means that decisions may be made without all of the current information on both the working and the overall costs of a project. Obviously, this is a recipe for disaster from an accounting, inventory, and managerial standpoint.
How does ERP Software for Door & Hardware Distributors solve the challenges of AIA Billing?
1. Account for Multiple Performance Obligations
Often, a distributor may have multiple performance obligations (contracts to transfer goods or services) at once.
ContractERP software accounts for specifications and billing progress for each contract individually, even down to a project’s door opening number designated by the architect. However, the contracts can also be viewed collectively so a wider perspective can be seen.
2. Group Product Categories Together
When ordering a door, contractors don’t want to pay separately for the hardware, frame, and the door itself. They want to pay for the entire package.
To aid in this method of billing, contractERP’s AIA billing function will group product categories together while still keeping simple and accurate records.
3. Accurately Track Inventory Levels and Records
Inventory tracking can be especially tricky with AIA billing as individual products can be grouped and shipped together incrementally over time.
ContractERP automatically maintains accurate inventory levels and records throughout the entire process so there are never any questions or shortages.
4. Bill Items as They Are Shipped and Simplify Invoices
Contractor invoices are simplified and organized to make quick and easy reading as groups of products are listed, rather than every piece.
ContractERP automatically bills contractors for groups of products as they are shipped, saving hassle and confusion.
5. See the Complete Picture
Being able to readily access both the details and the big picture all at once is an indispensable benefit to using the AIA billing feature as educated decisions can be made swiftly and accurately.
Perhaps the most significant part of the AIA billing feature in contractERP Software is that it is completely integrated and is displayed in real time. These two aspects alone will save your company a ton of aggravation and a ton of money.
The complicated forms are gone. The data is displayed in real time. You will finally have the complete picture and all the control at your fingertips.
Request a free demo of contractERP software for door and hardware distributors and see what we can do to make your projects more profitable.