The construction industry stands at a crossroads. With ongoing supply chain disruptions, labor shortages, and financial pressures amid economic uncertainty, firms are finding new ways to stay competitive and efficient. Yet, many are still relying on manual processes for lien waiver management and payments—causing delays, cash flow bottlenecks, increased exposure to check fraud, and project slowdowns.
Among the most common challenges in construction finance is the complexity of payment processing and lien waiver management. Ensuring payments are made as efficiently and securely as possible is critical—not just for maintaining strong supplier relationships but also for keeping projects on schedule. As the industry navigates market volatility, automation is proving to be a strategic advantage rather than just a convenience.
The State of the Construction Industry Amid Economic Uncertainty
Rising Material Costs and Supply Chain Disruptions Continue to Slow Projects
Supply chain delays have long impacted the construction sector, and they remain a persistent challenge—now compounded by rising material costs and evolving tariff policies. According to Resilinc, global supply chain disruptions surged by nearly 40% in 2024 compared to the previous year.
Beyond delays, high prices for key materials like steel, electrical components, and concrete are driving up project costs and stretching budgets. The National Association of Home Builders (NAHB) reported that the cost of building materials has risen by 34% since December 2020, outpacing the general rate of inflation.
Uncertainty around new and proposed tariffs is also prompting many contractors to delay purchasing decisions or reevaluate supplier relationships. These pressures not only extend project timelines but also create financial strain—particularly as contractors often wait months to be paid.
Cash Flow Challenges and the Need for Faster Payments
The payment process in construction is one of the longest of any industry, with contractors waiting an average of over three months to receive payment. This delay is more than twice the recommended 45-day DSO (days sales outstanding) necessary for healthy cash flow and credit management. Payment delays create a ripple effect, preventing contractors from paying suppliers and subcontractors on time, ultimately leading to further project slowdowns.
Labor Shortage Forces Contractors to Rethink Inefficiencies
According to Deloitte’s survey, 82% of construction executives cited workforce shortages as a top challenge in 2023, and more than half of the respondents stated they plan to invest in digital solutions such as artificial intelligence (AI) and Building Information Modeling (BIM) to help offset labor constraints.
While signs of easing pressure have emerged—U.S. construction recorded 236,000 open, unfilled jobs on the last day of January 2025, a 42% drop from the same time in 2024, according to the Bureau of Labor Statistics— the decline may reflect growing economic uncertainty rather than a resolved labor shortage, as noted by Construction Dive.
With fewer workers available, businesses should streamline financial operations to minimize inefficiencies and prevent costly delays. Manual processes that once seemed manageable are now creating bottlenecks and causing unnecessary administrative burdens.
A Smarter Approach to Lien Waiver and Payment Management
As supply chain disruptions, cash flow pressures, and labor shortages continue to strain the industry, construction firms need to rethink how they manage financial workflows–especially in a challenging economic environment. One key area where inefficiencies can have a major impact is lien waiver and payment management.
Lien waivers are essential for ensuring payments are made and protecting all parties in a construction project, yet traditional lien waiver management is paper-intensive and difficult to manage. With automated solutions, construction firms can more easily track lien waivers and ensure payments are released promptly after the waiver is signed.
However, manual payment processes often cause delays, reconciliation challenges, and unnecessary friction between contractors and suppliers. This is where automated ePayments provide a significant advantage.
By automating the lien waiver and payment process, construction firms can:
•Increase Efficiency: Automate all four lien waiver types—partial conditional, partial unconditional, final conditional, and final unconditional—while streamlining signatures with electronic signature integrations like DocuSign. Additionally, digital workflows can automatically retrieve waivers from a designated email inbox, reducing manual processing.
•Enhance Visibility: Manage purchase orders, invoices, lien waivers, and payments all in one platform. Automatically attach lien waivers to invoices and track their status across general contractors, subcontractors, and suppliers.
•Gain More Control: Pay suppliers quickly and securely after lien waivers are digitally signed while maintaining a detailed audit trail of all actions taken on lien waivers, invoices, and payments.
•Help Ensure Fast Payments: After a lien waiver is signed, funds can be quickly disbursed using preferred payment methods—reducing processing time, improving cash flow predictability, and minimizing fraud risk.
•Strengthen Supplier Relationships: Varied ePayment options help build trust by providing suppliers with timely electronic payments in the method they prefer.
The Value of Purpose-Built AP Automation for Construction Firms
The construction industry is undergoing a transformation, and firms that continue to rely on outdated, manual financial processes risk falling behind. To stay competitive, construction companies need a purpose-built AP automation solution designed specifically to solve the industry’s unique financial challenges.
Unlike generic financial tools, a construction-centric AP automation solution is built to support job-specific workflows, making it easier to manage invoices and payments against jobs, phases, cost codes, categories, and general ledger accounts. By centralizing lien waiver management and payments in one platform, construction firms can gain financial visibility and greater control over cash flow.
By automating critical processes like lien waiver management and payments with a purpose-built AP Automation tool, firms can reduce inefficiencies and help ensure faster and more secure payments—helping to stabilize cash flow, strengthen supplier relationships, and keep projects on schedule despite ongoing industry challenges.
The construction firms that embrace automation now will not only streamline operations but also maintain a competitive edge in a rapidly evolving industry.
Ready to learn more about how automating lien waiver management and ePayment solutions can transform your financial workflows? Connect with an expert today and see how automation can help your construction firm stay ahead.
