A new report reveals a staggering 64% of construction projects, including those in New Zealand, are plagued by overbilling. This alarming statistic, unveiled in Payapps’ “Building the Future” report, highlights the urgent need for tighter financial controls and digital solutions in an industry already grappling with rising costs.
Key Findings:
- Overbilling widespread: with 47% of respondents encountering it occasionally and 17% experiencing it frequently. The report surveyed construction professionals across several countries, including New Zealand, where the construction sector faces challenges of labour shortages and material price hikes.
High percentage of overbilling observed in progress claims.
- Desire for improvement: The report indicates that 44% of respondents expressed a desire to enhance cost management, but are often hindered by manual processes and time constraints.
QS & CAs expressed a strong desire for enhanced cost management.
- Technology is key: The report highlights the pivotal role of technology in addressing overbilling, with a significant number of respondents (87%) who find contract variation management straightforward utilising specialised construction software, like Payapps.
Construction technology is key to managing complex variations.
Payapps Co-Founder Urges Shift to Digital Solutions:
“The construction industry is facing a perfect storm of cost pressures. Overbilling is not the cause of this crisis, but it does exacerbate it. By automating time-consuming tasks like payment claims and providing greater visibility of contract variations, Payapps frees up valuable time for construction professionals to focus on strategic cost management initiatives.”
Geoff Tarrant, Co-Founder of Payapps, emphasises the need for tighter financial controls and digital solutions to combat the issue of overbilling in the construction industry.
The NZ Construction Industry’s Unique Challenges
The New Zealand construction industry faces unique challenges that make overbilling particularly problematic:
- Skills shortage: The ongoing shortage of skilled labour puts pressure on project timelines and budgets, making overbilling a more significant risk.
- Material price volatility: Fluctuations in the cost of construction materials can lead to unexpected expenses and overbilling.
- Complex regulations: New Zealand’s regulatory environment for construction projects is complex, making accurate financial management and avoiding overbilling even more critical.
Payapps: A Solution for New Zealand Construction
Payapps, the award-winning construction software solution, offers a tailored solution for the New Zealand construction industry to combat overbilling and improve financial management. By automating and streamlining complex payment claim processes, Payapps enables construction professionals to:
- Gain control of variations: Easily manage contract variations, ensuring accurate and transparent tracking of changes to project scope and cost.
- Simplify compliance: Navigate New Zealand’s specific regulatory requirements with ease, reducing the risk of non-compliance and associated financial penalties. Payapps has been endorsed by The Ministry of Business Innovation and Employment to assist in complying with the Construction Contracts Act.
- Strengthen collaboration: Foster better communication and collaboration between contractors and subcontractors, promoting trust and minimising disputes.
Protect Your Bottom Line with Payapps
The “Building the Future” report serves as a stark reminder of the overbilling challenges faced by the New Zealand construction industry. By embracing digital solutions like Payapps, construction firms can protect their bottom line, improve efficiency, and foster a more sustainable future for the industry.
To learn more about how Payapps can help your New Zealand construction firm address overbilling and improve financial management, download the complete “Building the Future” report or contact Payapps today.
