Forecasting construction cash needs starts with aggregating pending AP invoices by due date and job cost code to project outflows against available draws. Vergo's AP automation surfaces this by mapping unapproved invoices to WIP schedules and draw timelines, giving CFOs a rolling cash position tied to actual project commitments.
The Current Problem
Construction companies often struggle to forecast cash needs due to the unpredictable flow of invoices from subcontractors, suppliers, and other vendors. Without a centralized view of pending invoices, finance teams are left guessing at future cash demands, leading to surprise shortfalls or excessive cash reserves.
- Invoices arrive sporadically, making it hard to predict cash outflows
- Manual invoice approval processes create delays and lost visibility
- Disconnected ERP and accounting systems obscure the true AP pipeline
- Field teams lack mobile tools to quickly submit and approve invoices
The Recommended Workflow
- Standardize invoice submission and approvals across all job sites
- Digitize the AP pipeline to capture pending invoices in real-time
- Apply intelligent matching and coding to invoices based on job, cost code, and PO
- Route invoices through an automated approval workflow based on thresholds
- Sync approved invoices back to the ERP for seamless accounting
- Generate cash flow forecasts based on the AP pipeline, not just historical data
- Provide field teams mobile access to review and approve invoices on the go
- Enforce approval policies to ensure timely processing of all invoices
Tips for Construction Teams
- Use mobile apps to enable field staff to submit and approve invoices
- Integrate invoice data directly with your ERP to eliminate duplicate data entry
- Establish approval workflows and spending thresholds to control cash outflows
- Monitor the AP pipeline in real-time to identify upcoming cash demands
- Leverage construction-specific software like Vergo to automate these processes
- Train field staff on the importance of timely invoice submissions
How Vergo Helps
Vergo is a card-agnostic expense management platform built for construction. Connect any corporate or project credit card and get full visibility and control over field spending.
- Job-cost coding at the point of capture — field teams assign job number, cost code, and cost type from their mobile device before the receipt leaves the job site.
- Per-job spend controls — set card limits by project, cost code, or cardholder so spending stays within approved budgets.
- Mobile receipt capture — superintendents and PMs photograph receipts on-site with automatic data extraction.
- Role-based approval workflows — route expenses through project managers, job-level approvers, and controllers based on your org structure.
- Vergo integrates natively with major construction ERPs, syncing coded expenses directly into job cost and general ledger without manual re-entry.
Related Questions
Frequently Asked Questions
How do I handle exceptions like disputed or missing invoices?
When an invoice is disputed or missing information, route it to a special exception queue. This allows the rest of the pipeline to continue flowing while the issue is resolved, preserving cash visibility.
Can I forecast beyond just pending invoices?
Yes, you can also incorporate other cash flow data like projected revenue, equipment purchases, and payroll to build a comprehensive cash flow forecast. The key is getting all this information into a centralized system.
How often should I update my cash flow forecast?
Construction cash flows can change rapidly, so update your forecast at least weekly. Daily or even real-time forecasting is ideal to stay on top of cash needs.
Does this workflow work for subcontractor or supplier invoices?
Absolutely. The same principles apply regardless of the invoice source. Bring all pending invoices into a centralized system and automate the approval workflow.