Contact Us

Key Takeaways

  • Manual invoice processing drains resources unnecessarily – Construction companies spend an average of $42 per invoice when processing manually, with 23% requiring revision due to errors, while automation reduces costs to just $2.36 per invoice
  • Digital transformation accelerates but full adoption lags – While 37% of construction businesses use AI and machine learning as of early 2025, only 18% have fully automated AP processes despite 80% having some automation in place
  • Fulfillment inefficiencies compound project delays – With large construction projects running 20% behind schedule and as much as 80% over budget, supply chain visibility and inventory management become critical success factors
  • Technology adoption directly correlates with revenue growth – Each additional technology adopted is associated with a 1.14% revenue increase, while contractors with real-time cost visibility complete projects 23% faster and 18% more profitably

The State of Construction Invoicing: Costly Inefficiencies

1. Payment delays cost the construction industry $273 billion annually

Billing disputes and payment delays generate $273 billion in annual losses across the global construction industry. These delays stem from complex approval workflows, misaligned billing milestones, and manual verification processes that characterize traditional construction payment systems. Modern NetSuite ERP implementations address these challenges through automated workflows and real-time project visibility that align billing with work completion. Source: Levelset

2. Construction payment cycles stretch to 83 days on average

The typical payment cycle in construction extends to 83 days, nearly three times the 30-day standard in other industries. Invoice payments typically take 50-70 days to process, with some businesses taking over 3 months on average to collect payment. This extended timeline strains cash flow, particularly for subcontractors and smaller firms operating on thin margins. Almost half of all construction businesses offer customers 30 days or more to pay invoices, yet only 11% regularly charge interest or fees for late payments. Source: LMS Project

3. Construction projects process 75-200 invoices from multiple vendors

The average construction project processes between 75-200 invoices from multiple vendors and subcontractors, creating significant administrative complexity. Each invoice requires verification against work completion, compliance documentation, lien waivers, and payment schedules. This volume overwhelms manual processing capabilities, explaining why 23% of construction invoices require revision due to errors or compliance issues. The complexity demands specialized solutions beyond generic accounting software. Source: Commerce Bank

4. Construction companies lose 5% of revenue to billing errors and delays

Systematic billing issues and payment delays cost construction firms 5% of revenue on average. With construction profit margins averaging just 5%, these losses can eliminate profitability entirely. The impact compounds when contractors increase bids by up to 10% to compensate for expected payment delays, reducing competitiveness. NetSuite automation helps recover this lost revenue through improved accuracy and accelerated collections. Source: Commerce Bank

Accounts Payable Automation: The Efficiency Solution

5. AP automation reduces processing time by 73%

Construction-specific AP automation can reduce processing time by 73%, transforming multi-hour workflows into minutes. This improvement stems from automated data capture, intelligent routing, and systematic compliance verification that eliminate manual touchpoints. The time savings allow AP teams to redirect capacity toward strategic activities like vendor relationship management and early payment discount capture. Source: Stampli

6. Fully automated systems process 23,333 invoices annually per FTE

While average AP FTEs process 10,853 invoices per year in standard operations, fully automated AP systems enable one FTE to process 23,333 invoices annually—a 115% productivity improvement. This scalability proves essential as project counts increase without proportional headcount additions. The efficiency gains explain why NetSuite's automation capabilities help clients manage growth without linear cost increases. Source: Stampli

7. Managing lien waivers consumes 11 hours weekly

Lien waiver management consumes 11 hours weekly for average construction companies, representing a construction-specific compliance burden that generic AP systems don't address. Automated systems can eliminate 94% of lien waiver errors while recovering this lost capacity. Additionally, 92% of construction companies hold 5-10% retention on subcontractor payments, requiring careful tracking throughout project lifecycles. Source: Levelset

Digital Adoption Accelerates in Construction

8. 79% of building contractors use software for data management

Software adoption for data and information handling reached 79% among building contractors, indicating broad recognition that manual spreadsheet approaches can't support modern project complexity. However, software quality and integration capabilities vary dramatically, with fragmented systems creating as many problems as they solve without proper integration architecture. Source: G2

9. Global construction software market grows at 12.9% CAGR

The global construction software market is projected to grow from $4.06 billion in 2024 to $4.59 billion in 2025, representing 12.9% CAGR. This growth reflects increasing recognition that software investment delivers measurable ROI through efficiency gains, error reduction, and competitive differentiation in an increasingly digital industry. Source: Construction software market

Project Performance and Fulfillment Challenges

10. Large construction projects run 20% behind schedule and 80% over budget

Large construction projects run 20% behind schedule on average and go as much as 80% over budget. These delays and overruns often stem from fulfillment issues including material procurement delays, inventory management problems, and supply chain disruptions. Integrated ERP systems providing supply chain visibility help contractors anticipate and mitigate these risks proactively. Source: G2

11. 98% of mega projects experience delays or budget overruns

Research shows 98% of mega projects experience delays or budget overruns, highlighting systemic challenges in large-scale construction execution. This near-universal failure rate demands better project controls, real-time cost visibility, and proactive risk management capabilities that modern ERP systems provide. Source: G2

12. Construction Backlog Indicator stands at 8.8 months

The Construction Backlog Indicator reached 8.8 months in July 2025, indicating strong demand but also potential capacity constraints. This backlog creates urgency for operational efficiency improvements, as firms must execute more projects with the same resources. Process automation and NetSuite project management capabilities help teams handle increased volume without proportional headcount growth. Source: Backlog indicators

13. 67% of contractors using generic AP automation still rely on manual processes

Despite implementing automation, 67% of contractors who deployed generic AP automation still relied on manual processes for construction-specific requirements like lien waiver management, retainage tracking, and AIA billing formats. This highlights the importance of construction-specific solutions rather than adapting generic business software to industry requirements. Source: Levelset

Material Costs and Economic Pressures

14. Steel and cement prices jumped over 20% between 2021-2023

Core construction materials including steel and cement jumped over 20% between 2021-2023, with cement costs alone increasing by approximately 11% year-over-year in 2023.. These cost pressures make efficient invoicing and procurement workflows essential for maintaining profitability in an industry with traditionally thin margins. Source: Material cost analysis

15. Labor wages for skilled trades climb 5-7% annually

Labor wages climb 5-7% annually in many markets as construction workforce challenges persist. Average hourly wage reached $39.98 in August 2025, with wages increasing 4.2% year-over-year. Combined with material inflation, these wage increases compress margins and heighten the importance of operational efficiency improvements. Source: Construction Coverage

16. Global construction cost increases of up to 7% anticipated

Global construction costs are anticipated to increase up to 7% in 2025, compounding margin pressures across industry. This inflation makes every efficiency improvement more valuable, as operational waste that seemed tolerable at lower cost levels now threatens profitability. Organizations implementing NetSuite for wholesale distributors benefit from procurement and vendor coordination expertise that helps manage these pressures. Source: Buildern

Workforce and Capacity Constraints

17. Construction industry faces massive skilled labor shortage

The construction industry faces a significant skilled labor shortage, with 94% of construction firms having open positions for hourly craft workers in 2024, up from 85% in 2023. This labor shortage creates capacity constraints that limit project execution capability regardless of backlog levels. The gap explains why technology solutions enabling smaller teams to accomplish more work through automation become essential. Source: Construction Coverage

18. 41% of construction workers expected to retire by 2031

An alarming 41% of construction workers expected to retire by 2031, creating a looming workforce cliff that will intensify labor shortages. This demographic reality demands technology solutions that enable smaller teams to accomplish more work through automation and process optimization. Systems like NetSuite for manufacturers help optimize work orders, labor costing, and scheduling to maximize workforce productivity. Source: Buildern

Technology ROI and Performance Impact

19. Contractors with real-time cost visibility complete projects 23% faster

Contractors implementing real-time cost visibility complete projects 23% faster than competitors relying on delayed financial reporting. This acceleration stems from the ability to identify and address cost overruns, resource constraints, and schedule risks immediately rather than discovering problems weeks later during monthly reviews. Speed improvements translate directly to capacity increases and customer satisfaction. Source: Commerce Bank

20. BIM can reduce construction costs by 10%

Building Information Modeling (BIM) can reduce construction costs by 10% through improved planning accuracy and coordination. BIM also reduces likelihood of budgeting errors by 40% and shortens construction time by more than 10%. These improvements compound when BIM integrates with ERP systems for seamless data flow from design through execution and billing. Source: Buildern

21. Teams using proposal software have 45% win rate

Teams using proposal software achieve an average 45% proposal win rate compared to lower rates for manual proposal processes. These systems also enable teams to submit 46% more responses annually through efficiency gains, compounding competitive advantage. Higher volume combined with higher win rates transforms business development effectiveness. Source: Buildern

Industry Growth and Market Dynamics

22. Total U.S. construction spending reached $2.139 trillion

Total U.S. construction spending reached $2.139 trillion in July 2025, though this represented 2.8% decline year-over-year reflecting economic headwinds. Despite short-term fluctuations, the global construction market is projected to grow from $11.4 trillion in 2024 to $12.1 trillion in 2025, with 5-6% CAGR expected through 2030. Source: Construction spending data

23. Infrastructure construction growing at 8% CAGR through 2030

Infrastructure construction growing at 8% CAGR through 2030, outpacing overall industry growth and creating significant opportunities for firms positioned in this segment. This growth comes despite commercial construction declining 13.3% year-over-year, highlighting the importance of diversified project portfolios and ability to pivot between market segments. Source: Infrastructure growth trends

24. Construction contributes 13% of global GDP

Construction-related spending contributes 13% of global GDP, representing one of the world's largest economic sectors. In the United States specifically, construction accounts for 4.5% of GDP. This economic significance underscores the importance of efficiency improvements that ripple throughout entire economies. Source: G2

Frequently Asked Questions

How much do payment delays actually cost construction companies?

Payment delays and billing disputes cost the construction industry $273 billion annually, with individual companies losing 5% of revenue on average to these inefficiencies. Given that construction profit margins average just 5%, these losses can eliminate profitability entirely. The 83-day payment cycles create cash flow challenges that force contractors to carry excessive working capital or turn down profitable work.

How has digital adoption impacted construction revenue?

Research shows each technology adopted correlates with 1.14% revenue increase—meaning a $100 million company could gain $1.14 million per technology. Contractors with real-time cost visibility specifically complete projects 23% faster and 18% more profitably than competitors lacking these capabilities. The competitive gaps widen as 37% of construction businesses now use AI and machine learning.

What makes construction invoicing different from other industries?

Construction involves 75-200 invoices per project from multiple vendors, each requiring lien waiver verification, retainage tracking, and progress billing validation. The complexity explains why 23% of invoices require revision and lien waiver management alone consumes 11 hours weekly. Generic accounting systems can't handle these requirements, which is why construction firms need specialized ERP platforms with industry-specific workflows.

Why are large construction projects consistently delayed and over budget?

Large construction projects run 20% behind schedule on average and go as much as 80% over budget, with 98% of mega projects experiencing delays or cost overruns. These systemic issues stem from fulfillment challenges including material procurement delays, inventory management problems, and supply chain disruptions that integrated ERP systems with supply chain visibility help contractors anticipate and mitigate proactively.

How can Anchor Group help construction companies improve invoicing and fulfillment?

Anchor Group specializes in implementing NetSuite for construction companies, bringing deep expertise in procurement, vendor coordination, inventory management, and fulfillment from our work with wholesale distributors and manufacturers. Our experience with service companies—including field service scheduling, project invoicing, and parts inventory fulfillment—directly applies to construction operations. We don't just implement software; we nerd out over finding better, smarter ways to help your backend systems support real business goals. If you're ready to transform your construction invoicing and fulfillment processes, contact us to discuss how we can help you earn your keep—and help you earn yours.