How do other construction companies handle their AP?

Key takeaways

• Construction AP requires every invoice to be coded to a specific job, cost code, and phase before approval—adding complexity beyond standard AP workflows.
• Leading firms process invoices in 12–18 days on average, while manual workflows often exceed 30 days, risking missed discounts and strained subcontractor relationships.
• Modern construction teams use AP automation that integrates job costing, compliance validation, and ERP syncing to reduce cycle time and exception rates.
• Vergo runs card spend, employee reimbursements, and AP invoices through one coding model, proposing the coding by inference from your own accounting structure so new vendors are coded on first sight without building rule libraries.
• Benchmarking AP performance—measuring cycle time, cost-per-invoice, and exception rate—helps controllers identify inefficiencies and improve cash flow visibility.

How construction AP differs from other industries

Accounts payable in construction is fundamentally different from AP in other industries. Every invoice must be coded to a specific job, cost code, and phase before it can be approved—turning what would be a simple two-step process in retail or manufacturing into a multi-layered workflow involving project managers, superintendents, and controllers. In a typical construction company, AP begins when a vendor invoice arrives—usually by email, sometimes by mail, and occasionally hand-delivered on a jobsite. That invoice must be matched against a purchase order or subcontract, validated against the committed cost on the job budget, coded to the correct cost code, and routed to the project manager who owns that budget line. Only after field-level and accounting-level approval does the invoice enter the ERP for payment scheduling. The complexity multiplies with scale: a general contractor running 15 active projects might process 800–1,200 invoices per month, each requiring job-specific coding. Vergo proposes the coding by inference from your own accounting structure and history, so new vendors are coded on first sight without building rule libraries or maintaining keyword lists.

Why AP benchmarking matters in construction

Controllers who cannot benchmark their AP process against peers risk accepting inefficiency as normal. Industry data reveals wide performance gaps: ENR-ranked contractors average 12–18 days to process an invoice from receipt to approval, while firms relying on fully manual workflows often exceed 30 days. Those gaps have real financial consequences. A 2/10 net 30 discount on a $400,000 concrete pour saves $8,000—but only if AP processes the invoice within 10 days. Slow payments cause subs to deprioritize your projects, delay mobilization, or add contingency to future bids. When invoices sit unapproved in email inboxes, committed costs are understated and job-cost reports become unreliable. Missing lien waivers or expired COIs at payment time creates legal risk on every project. For a controller, benchmarking AP means measuring invoice cycle time, cost-per-invoice, exception rate, and first-pass match rate.

A practical example: three AP maturity levels

A 45-person general contractor receives 600 invoices monthly. The AP clerk prints each invoice, stamps it with a routing slip, and walks it to the PM's desk for job-code approval. Average cycle time: 27 days. During month-end close, the controller spends 15+ hours reconciling unapproved invoices against committed costs in Sage 300. A mechanical subcontractor uses OCR-based invoice capture to extract vendor name, amount, and invoice number automatically. Invoices are matched against open purchase orders by PO number. When a match is found, the invoice routes directly to the responsible PM for cost-code confirmation. Unmatched invoices go to AP for manual review. Cycle time drops to 11 days. Exception rate falls from 35% to 12%. At a $200M GC, before releasing any subcontractor payment, the system checks for a current certificate of insurance, a signed lien waiver for the prior payment, and verified W-9 information. Payments are held automatically when documents are missing, reducing payment-run preparation from a full day to two hours.

How leading firms modernize construction AP

Leading construction firms now use AP automation platforms that understand job costing, cost codes, and construction-specific compliance requirements. These tools replace manual routing slips with digital approval workflows tied to project budgets and committed costs. The best platforms integrate natively with construction ERPs including Sage 100/300, Viewpoint Vista/Spectrum, Procore, Foundation, QuickBooks, Acumatica, CMiC, COINS, Epicor, Jonas, and Deltek. Controllers looking to benchmark and modernize their AP prioritize systems that automate invoice capture, map line items to job cost codes, route approvals based on project ownership, and validate compliance documents before payment. These capabilities address the exact workflow gaps that generic AP tools miss. For a controller, the result is faster cycle times, fewer exceptions, and reliable job-cost data. For a project manager, it means invoices against their budget are processed fast enough to keep subcontractors paid and compliant documents current.

How Vergo handles this

Vergo runs card spend, employee reimbursements, and AP invoices through one coding model—same coding, same review, one reconciliation. Vergo proposes the coding by inference from your own accounting structure and history, so new vendors are coded on first sight without building rule libraries or maintaining keyword lists. Every coding shows why it was chosen, so a reviewer confirms in seconds instead of re-coding by hand. Approval workflows are optional and fit how you already control spend: route by GL account, by amount, or by project—or skip approval flows entirely and let policy flags catch only what breaks a rule. Transactions are ready to code the moment they happen, and once they clear, they sync into your accounting or ERP software. Vergo integrates with every ERP and accounting software, and connecting your existing cards involves no card applications, no re-issuing, and no banking change.

Related questions

• How do general contractors manage hundreds of vendor invoices per month?
• What is the cost of processing a single invoice manually in construction?
• How do I reduce the risk of vendor fraud in construction accounts payable?
• What is the best AP automation software for construction companies using Buildertrend?