Receiving payments and online payment processing with Buildertrend

On this episode of “The Better Way: A podcast by Buildertrend,” Reece and Zach are discussing how you can use Buildertrend to keep clients informed on how much they’ve paid and how much is remaining on their project. They’re also talking about how to process online payments through our Pro Service Buildertrend Payment Processing.

Check out the full episode to learn more about best practices for recording payments in Buildertrend and the benefits of using online payments.

WHAT ARE THE TYPES OF INVOICES AND WHERE CAN YOU INVOICE WITHIN BUILDERTREND?

Line-item invoice: A structured list based on cost codes

Flat-fee invoice: A lump sum with a general description

You can invoice through multiple features:

HOW DOES BUILDERTREND PAYMENT PROCESSING WORK?

LINKS AND MORE

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Reece Barnes and Zach Wojtowicz | Buildertrend

Intro:

Welcome to “The Better Way,” a podcast by Buildertrend. We are here to help you simplify and establish processes that will make meaningful changes to your company and help you achieve your goals. There’s a better way to run your construction business, the Buildertrend way. Tune in this season as our consultants, Reece Barnes and Zach Wojtowicz will help you master your financials.

In this episode, we’re talking about receiving payments, learn best practices for recording payments in Buildertrend, as well as the benefits of online payment processing.

Reece Barnes:

Hello everybody. And thank you for joining us for yet another episode of Zach and I’s financial series brought to you by Buildertrend. Zach, how’s it going? Are we ready to talk about receiving payments for our clients?

Zach Wojtowicz:

Episode four, baby. We’re really about to hit our stride right now.

Reece Barnes:

God, see, this is content that, again, I’d mentioned on a show before that this is just engaging in every sense of the word. This is on the edge of your seat, just chomping at the bit for more.

Zach Wojtowicz:

Don’t get too self-congratulatory there, my friend. It ain’t over yet.

Reece Barnes:

I don’t know what that means. What does that mean? Don’t explain it.

Zach Wojtowicz:

Don’t worry. Don’t worry. Yeah.

Reece Barnes:

We have an agenda typed out for this one. What are we covering?

Zach Wojtowicz:

Yeah, let’s talk about best practices for Buildertrend and recording payments. So, how do we address getting money into the system? Where should you put it? What do you do? What are your options? And then we do want to talk a little bit about a pro service that we offer at Buildertrend.

You and I are consultants, one of our pro services. We have another one called WePay and using online payments through Buildertrend. So, we’ll kind of talk on that a little bit today and kind of weigh the cost versus the benefits that you get. So, let’s get into it.

Now, every customer, this is one thing that I’ve always run into when I’ve been traveling with my customers. Remember, I’m an onsite consultant. So, I’ve had a lot of conversations about how do I get paid? That’s important for these companies, right? So that’s what keeps the lights on, literally.

Reece Barnes:

Yeah, it’s a big deal.

Zach Wojtowicz:

It’s why they’re a business. So, the biggest thing that I think is a goal of using Buildertrend is actually getting your customers involved in that process. You have the schedule, you have your documentation, you have ways to delegate tasks. Well, who are you doing this for?

It’s for your customers. And ultimately, a happy customer has the ability to generate more business for you.

Reece Barnes:

Correct.

Zach Wojtowicz:

In modern day business you have your search engine optimization. You want your Google hits to look good. You want everything that you can do to have your company be represented in a positive way to the broader public. Buildertrend has a way to leverage that. You have a cutting edge piece of technology, everything online, they have the ability to log into it. Why shouldn’t we also use that to help them be informed about where they’re at financially with the contract?

Reece Barnes:

Sure.

Zach Wojtowicz:

So, whenever I’m talking about receiving payments, I’m always coming at it from a place of, for your customer, and some people, they don’t have customers, they build specs. Well, you still might want to track kind of the overall final contract price of what you sold it for and be able to run some core reporting inside of Buildertrend by tracking invoices and putting that information into your system post sale. So even though this episode primarily is going to focus in on your traditional builder, who has a client that they’re doing work for. It can still apply to your spec operations and bank draws and those other situations that are going through.

Reece Barnes:

Sure.

Zach Wojtowicz:

So, we’re going to get more into that reporting in episode six. I know we’re in episode four, but we got to keep you coming back. Right?

Reece Barnes:

Have to.

Zach Wojtowicz:

Can’t just give it to you now.

Reece Barnes:

Well, and kind of just not to stray too far from the path here, just a little addition.

Zach Wojtowicz:

Oh yeah.

Reece Barnes:

The bulk of everything you just mentioned is, this is a feature or a pro serve, whatever bucket you want to put it in. This is functionality that provides our clients’ clients or customers a better customer experience.

Zach Wojtowicz:

Right.

Reece Barnes:

That’s all this is. When you’re looking at it, and you kind of alluded to and touched on Zack, is historically in the construction industry is the person who wants the remodel done or who wants the new house built might have felt a little slighted or a little in the shadow with not as much communication or transparency from the contractor. That’s no slight to the contractor, but that’s, ultimately, the void the builder is trying to fill. Payments is going to be another one of those because again, whether you want them to see the full budget, portions of the budget, where they’re out on the schedule, whatever the case is, we can at least provide an option for more transparency, a better customer experience, better SEO, better reviews, better word of mouth marketing, whatever the case is.

Zach Wojtowicz:

And if you think about how the housing market is going to change, the population who are buying new homes and how things are going, the people buying those homes are going to be more technologically advanced than they had been in the last 20, 30, 40 years, obviously, as technology becomes more and more part of our day-to-day lives. We all live with our cell phones in our hands. We’re all connected to the internet 24/7.

Well, the younger generation are going to be the ones buying homes. And they’re going to have an expectation and research that builder before they even go into the contract with that builder to weigh their options.

Reece Barnes:

A conversation for that matter.

Zach Wojtowicz:

Yeah. So, you’re going to be able to bring this up and say you already have apps for everything. You should have an app for your construction.

Reece Barnes:

We do.

Zach Wojtowicz:

Building that into it, right?

Reece Barnes:

Right.

Zach Wojtowicz:

So, that’s kind of where we’re coming from when we’re talking about recording these payments and how do you go about doing it in the right way? It’s a transparency thing. When your customer logs in, they’re going to be able to see their job running total, which is contract amount, plus any additional costs that maybe came up through a change order, or maybe you’re utilizing Buildertrend selections, and the job running total reflects that they’ve gone over their allowances. All that is in play here, and so at what point do you go about and actually request your money?

Reece Barnes:

Collect it. Yeah.

Zach Wojtowicz:

So, there are two ways to do that in Buildertrend. You can use a line item invoice, going back to the running theme, what kind of inspired this conversation, which is cost codes. You’ve built this structure on your estimate. You’re using those cost codes on your change orders. You’re using those cost codes on your bills and POs, and now you can invoice off of those things. So you’ve utilized your specific things that you’re using to build the house, or remodel the house. And now, you’re using those to inspire what your invoices are going to look like.

Or you can do a flat fee invoice. So, this would just be a lump sum with a general description of what you’re requesting money for. Ultimately, that’s up to you about how you want to look at it. I’ve seen really, really beautiful invoices that have lots of data points to it. This is how much we originally said, this is what we billed you for. This is the percentage left. That’s going to be handled better in QuickBooks off their invoicing operation, but you can get very close in Buildertrend to where you can track how much have I billed for already? And how much this invoice is reflecting, which specific items I’ve actually used in my program up until this point.

Or maybe that’s too much. Maybe you just want a general lump sum. That’s fine. The cool thing about Buildertrend is you can still invoice off of different parts and then turn it into a flat fee so that the detail is still generic and just a request for a lump sum of money. So, that’s the workflow we’re working towards is, I’ve done all the work. I’ve got my cost codes set up. I’ve got my estimate in, I’m using change orders. Now, I’m just taking that and I’m bringing it to its natural step, which is requesting for payments, requesting for money off of that.

Reece Barnes:

Nice. I’m trying to think of a situation to where it would be more advantageous to do flat fee, as opposed to line item invoicing. Might not be the conversation for this though.

Zach Wojtowicz:

Yeah, it just varies on the type of …

Reece Barnes:

On operation.

Zach Wojtowicz:

And how you prefer it. Some people don’t want to have a really detailed invoice because, ultimately, they signed a contract that here’s what we’re going to do. And here’s when we’re going to expect payment. And they’re just a generic draw schedule. You have that ability. Other people have a really detailed line item estimate that lays out every cost and expense. And, they’re trying to hit that target. And so, for transparency purposes, they’re going to invoice identically off of that estimate.

Some people have a hybrid where they do itemize it, but they’re not necessarily doing a draw schedule. They just sort of, 50% now and then final payment later. That’s a conversation for your company and your operations about your cashflow. When do I need my money? That also impacts your tax payments as well. When are you recognizing that revenue? That’s not really what Buildertrend’s trying to address. We’re just talking about why should you put this into Buildertrend? What does it benefit and what is the functionality for you to be able to do that?

So, the thing I want to point out more than anything is you can invoice off all these different pieces. So, let’s take your classic situation with, I’ve put my budget into Buildertrend. I put my estimate. Well …

Reece Barnes:

Sure.

Zach Wojtowicz:

… because that lays out my foundation of costs, this is what I’m expecting to receive with my markup and everything. I’m able to go to the estimate and use checked actions on the left-hand side and create an owner estimate, an owner invoice right off of that estimate. Now, I can track how much have I estimated or excuse me, invoice off of already? And how much percentage wise do I want to call for this specific invoice? And give me that exact amount.

Again, going back to our QuickBooks amount or QuickBooks conversations, you’re able to then throw that over into QuickBooks, receive your payment, and then update that payment back in Buildertrend as soon as you receive that money in your QuickBooks account. So that’s the most traditional way that people are going to use this. I have a budget, I’m going to go invoice off of it, and then I’m going to go get my money, update it, and it’ll talk back.

So, you really have a good handle of kind of, when can I expect things to be coming in? When was my payment actually made, and I don’t need my accounting software at that point.

Reece Barnes:

Sure.

Zach Wojtowicz:

But then there are some other situations where things will come into play. What about change orders? And this is a conversation I’ve had with a lot of people. When I go to the store, and I want to purchase something, I’m expected to pay up front. Right?

Reece Barnes:

Right.

Zach Wojtowicz:

Well, change orders in construction, a lot of times builders have floated the money for their customers. And even worse, sometimes these conversations are happening where it’s just a handshake deal, or yep, we can do it. And they don’t document.

Reece Barnes:

All the time.

Zach Wojtowicz:

All the time.

Reece Barnes:

All the time.

Zach Wojtowicz:

I was at a builder that had a $50,000 change order miss communicated. The builder ordered the materials and did the work, and they went to ask the customer for the money and the customer said, I never approved this. And they fought them, and they ended up in litigation over this and ended up losing because they had nothing documented saying that this was the case. You hate to hear it, right?

Well, Buildertrend opens up that avenue to where you don’t have that miscommunication. Customer logs in, customer can see their contract, customer can see their job running total, customer can see their approved change orders. You have them sign off on it. The contract now reflects that pricing. There’s not that confusion, that handshake. Is it a little bit more work to get those change orders documented because I know things can change so quickly? It is. Is that work potentially going to save you a $50,000 lawsuit? Maybe. That’s definitely worth it.

Reece Barnes:

That’s something … go ahead. I’m sorry.

Zach Wojtowicz:

No, no, no. Sorry. I’m rambling.

Reece Barnes:

No, that’s the thing that is just so bothersome to me is how many times can you, as a business, get burned by a handshake deal or saying, yep, we’ll do this change order. Yep. We’ll do this upgrade. Yep. We’ll do this. Client gets the bill at the end. They go, those look like some pretty heavy contractor fees. I’m not paying them.

Zach Wojtowicz:

Right.

Reece Barnes:

We can’t do anything about it now. Right? Now, you’re still either, A, going to accept the loss because you didn’t document it or B, that’s the same conversation that we had on the podcast preview or to the series previous to this, is, yes, it might take you another 30 minutes, hour, whatever it is to draft up a change order. But when we’re putting together a $400 a square foot home, $2 million home, $3 million, $5 million home, $500,000 home, how many times you want to get burned on this?

Zach Wojtowicz:

Yeah.

Reece Barnes:

Have a system in place, be able to track the invoicing off of it at certain steps and certain features and functionality in the program. Be able to do your checks and balances and have data behind your business decisions or the business making decisions.

Zach Wojtowicz:

Yeah. I mean, documentation is security and that’s ultimately why you’re putting a system in place to be able to easily document it. And, an example of change orders, like you’re not going to put your estimate through your phone.

Reece Barnes:

Right.

Zach Wojtowicz:

Your change order, you’re out on site, you’re with the client. If they say, yeah, I’m thinking about having an upgrade on the countertop. Ballpark it, create the change order, have them approve it. Obviously, you might want to get a bid, but you can do that from your phone too, and get a price or call your sub, get the number, then create it, have them sign off on your phone, done.

Reece Barnes:

Right.

Zach Wojtowicz:

And you’re just eliminating that potential variable. That’s going to make you a lot more secure in how you’re running your operation. And I know things can change a lot and they can change quickly. And there’s back and forth and all that. But there is always a cutoff point to say, okay, we’ve had these conversations, we need a signature in order for you to do things. That’s the right way to do it and there’s something to be said about that.

Reece Barnes:

I hear it all the time about you don’t know this industry, you don’t know what demographic we’re in or what the reputation means to people and holding people to all of these systems and processes. The beauty behind the system or a process is that it’s at least there.

Zach Wojtowicz:

Right.

Reece Barnes:

If it’s not there, then you can’t hold anyone accountable. Whether that’s yourself or a project manager or a client.

Zach Wojtowicz:

Right.

Reece Barnes:

If we have the process in place, then we can at least decide what we do with it at that step. If we want to chase somebody for a $50,000 change order that we didn’t collect on, but we want to save our reputation, and we don’t want to be known as the contractor, that’s taking our clients to court. At least you have that option. If you do want to take them to court, if you do want to take this to litigation, then you’re not going to get hosed on attorney fees. You’re not going to waste your time. It’s not going to be the stress. You’re just going to say, look, this is the situation. This is the agreement we had. This is what they wanted. I put it in and they’re not paying for it.

Right? You’re just setting yourself up for other areas of success, whether you use them or not.

Zach Wojtowicz:

And it’s a lot easier to be reactive than it is to be proactive, but …

Reece Barnes:

Entirely.

Zach Wojtowicz:

… by being proactive, you’re staving off a lot of headaches down the road, on anything in business …

Reece Barnes:

On anything.

Zach Wojtowicz:

… and running a business. The more you can control what’s happening, the better you’re going to be. I remember a story as well, another builder in Alabama I was working with who made a great point. It really changed the way that I even looked at our own customer.

She said, for a long time, everything ran through one or two people. And we started to realize that a business should not be dependent on one person. It should be dependent on a system, so that if that person ever leaves the company, for whatever reason …

Reece Barnes:

Fill the spot.

Zach Wojtowicz:

… the system does not collapse.

Reece Barnes:

Totally.

Zach Wojtowicz:

It continues to run. And instead, you’re training someone how the system works, not having to find someone with the skillset that matches exactly what you looked at or what your previous employee looked at.

Well change order processes, having budgets in Buildertrend, being able to job cost in Buildertrend, all these topics we’re going through is really trying to emphasize that main point that your company should not be reliant on a single owner, single project manager, right? A department. It is an operation and those operations should be interchangeable. And that’s really what this is trying to highlight.

Your customers are part of that too. You set the expectation for them as well. There’s always fear about using Buildertrend invoicing because like they’re going to see too much. You have control. And that also means you control what they can and can’t see to a certain extent.

So, even if you’re not showing them the job running total, if you’re still putting your information for you as a record in Buildertrend, you know where to find it later down the line to tell them, this is where we’re at. If it means you’re creating a manual report for them, so be it. We’re trying to make your life easier, but you can still do it, but it still needs to be somewhere. And you’re already using Buildertrend for so many other things it just makes sense to then move that into here as well.

So, there’s another piece to this too that we want to talk about. We mentioned that we have the ability to also request money through Buildertrend as well. So, we have a partnership with …

Reece Barnes:

Chase.

Zach Wojtowicz:

Chase, WePay. WePay was purchased by Chase, so it’s part of their system and they’ve really improved the setup to how this works. In the past, they did not use any sort of verification tool. Now, they use a system called Plaid and most major banks in the country works with Plaid. The setup for this is as little as three minutes, five minutes.

Reece Barnes:

What is it Zach, three minutes or five minutes? I want to know.

Zach Wojtowicz:

Well, I can do it in three minutes, but depending on your internet connection and cellular service, it can take a little bit longer. Get out there and make sure your bandwidth is good. You literally log into your bank through WePay. It runs the verification, use the same password, says you’re good to go. And now you can start hitting the pay online button through your invoices. Now, this is a really popular choice for people who do a lot of volume. I love it for change orders as well, because it just avoids that situation where you’re not getting your money up front and you’re not financing it on behalf of the client and then, trying to get your money after the fact.

So, you control this per job. You can say this customer wants to use online payments. This customer doesn’t. I think that’s really important. It’s not like you turn it on, and everyone’s holding to use this.

Reece Barnes:

Sure.

Zach Wojtowicz:

In the owner setup, you go through your process, you activate them. You ask them, would you be comfortable using an online payment system that we use through Buildertrend? You can make your payments right here in Buildertrend to us. You can set up a payment method. It takes very little time to actually set up. It has credit cards and ACH.

Reece Barnes:

Hook your debit card up.

Zach Wojtowicz:

Yep. Credit cards, they accept all major credit cards, Visa, MasterCard, Discover, American Express. With ACH, the transaction is 0.5% of the transaction with a $1.99 minimum and a $15 maximum. So, that means if you receive money over $3,000, the maximum amount you’re going to pay on that transaction is $15. Now, that sounds hefty. And I get this is the biggest hesitation with ACH payments is that that $15 fee, they start to add up.

And there’s no doubt that you’re going to have to pay a little bit of extra money for the convenience, but then, just take a step back and think about what are you actually getting by integrating this into your payment method? You’re not having to chase customers down for money, right? They’re filling it out of their online platform that you’re already using.

Reece Barnes:

Bingo.

Zach Wojtowicz:

It’s much easier to track where these payments are running rather than having to go into a different software in order to transact it or manage paper checks. So, just the actual mitigation of variables on that end, just the paperwork is eliminated. And ultimately, this is something that is more and more common. More people are using Venmo, using Square, using online payments, right? People start to expect these online options as a means to kind of get people to integrate it into how they do things.

So, the other cool thing is if you’re a Chase customer, and nationally is, obviously, a large bank. It’s same-day transaction, so you can get your money that day. If you’re not a Chase customer, you still see an average time to flip of one to two days. So, it’s still a very fast service built in your transaction. The way it works with their QuickBooks is it literally creates the invoice. And then, once you get your money, it just ties into that invoice, and you’re good.

So, your Buildertrend is updated at once as the QuickBooks invoices is updated. So now, you’re really eliminating double entry. You don’t even have to go to your QuickBooks. It just kind of pulls it in, invoice is paid and away you go.

Reece Barnes:

One thing I do want to add …

Zach Wojtowicz:

Yeah, no, go ahead.

Reece Barnes:

The whole thing that we’re kind of tracking on here is our clients’ clients experience, right? This is all about customer experience for our clients’ clients. At the end of the day, what this is going to be offering them is that convenience factor, is that same day. But also, you’re going to be offering a more efficient project. You’re able to come in on time under budget. A lot of what our clients are doing though, is they are rolling those fees over into their actual client’s estimate bill, whatever, as an IET fee or a software fee or whatever the case is. And when you are onboarding them and you are discussing these options, and you are saying, do you want to use online payments? Then that’s going to be a conversation that maybe have to be had. That’s an easy selling point, right?

If this is going to be, we’re going to be able to finish your house much more effectively because we’re able to get paid. We don’t have to wait on this. We can deliver product XYZ. It’s all about your client’s experience. And this is just another one of those features that’s going to make it easier for them, easier for you. Roll the fee over to them, or you take care of it. There’s a couple different ways you can approach it. But I wanted to throw that in there because that’s the book of this whole conversation, is making it easier for our clients’ clients.

Zach Wojtowicz:

That’s a great point. One of the other cool things is the limits on these transactions are sky high. In fact, I think it’s as high as $500,000 per transaction to start. So, you can really transact quite a bit of money because WePay has cut a deal with our nature of a construction business to have much higher transaction volumes than you would see with a lot of other vendors who offer these types of services. So that’s something to consider.

And we also offer credit cards and that’s a way people will kind of leverage getting money quicker at least, and say, hey, we charge 2.95% on a Visa purchase, but if you want to give us cash, we’ll waive that. And then you can kind of use that to get your money a little bit quicker as well, like on a change order situation.

So, you can get pretty creative as far as how you leverage receivables and cash flow by using these online payment options as a way to kind of encourage people to pay quicker in the long run.

So, if you have questions about this, highly recommend that you reach out …

Reece Barnes:

Call me.

Zach Wojtowicz:

… to our payment consultants in customer success operation. We have people on the phone who are able to speak to this to more detail and help you get set up. But it is a really great feature that I think a lot of people are hesitant to try. Think about the long-term benefits of what you get and see where that goes and where it takes you. Right?

So, this one today is a little shorter as far as the content, but we’re excited to talk about the next topic, which is job costing and the powerful features that come along with this. One thing to point out is if you’ve been listening to this and you’re not using Buildertrend’s Pro package, this is a great way to preview kind of what you can do with our Pro features.

We’re going to talk about the purchase order system, everything up until this point kind of apply to all users. The next few episodes are going to be diving into those deep features that you can kind of unlock once you actually kind of decided to go all in on Buildertrend.

Reece Barnes:

Love it.

Zach Wojtowicz:

Yep.

Reece Barnes:

I’m excited to …

Zach Wojtowicz:

Have anything to add there, Reece?

Reece Barnes:

I have very, very little to add. I liked that this was short and sweet, very informative. Job costing is going to be a big piece, like you’d mentioned with the pro, but also with the QuickBooks integration.

Zach Wojtowicz:

For sure.

Reece Barnes:

Job costing or cost codes rather, that’s going to be good. So, we’ll sign off here, and we’ll talk to you on the next one. Thanks guys.

Zach Wojtowicz:

Thanks guys.

Reece Barnes:

Thanks for listening to “The Better Way.” If you’re a Buildertrend customer schedule a training to learn more and all listeners be sure to rate, review and subscribe to “The Better Way” wherever you get your podcasts. Also visit buildertrend.com/podcast to sign up for the email notifications when the next season drops and explore our other podcasts, “The Building Code.” Don’t miss our next episode focused on handling job costs.


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