Contract disputes are costing the Australian economy around $7 billion a year, adding 6% to the overall cost of each project, according to a study by the Cooperative Research Centre of Construction Innovation.

The industry relies largely on pen and paper systems, and around 20% of projects end up in disputes, usually over variations and contracts.

Brian Seidler, Executive Director of the Master Builders Association of NSW, said “With residential and commercial construction predicted to grow exponentially over the next few years to cater for Australia’s population boom and major infrastructure upgrading, how the contraction parties deal with various payment processes needs to be resolved."

After 10 years working as a CFO in the construction industry, Lincoln Easton became frustrated by the problem, and could see a logical solution. So in 2011, he left his job, and dedicated himself to developing progressclaim.com (www.progressclaim.com), software that would allow builders and contractors to quickly and easily process payment claims any time, anywhere.

Easton explained, “This was something I had to do because I could see the needless suffering of both parties. Builders and contractors were getting into arguments over something that could be automated.

“Payment disputes end up affecting the consumer, the mums and dads in many cases, who are building houses or buying apartments, because ultimately payment disputes stop production. Sometimes it means houses aren’t built, and sometimes things are ripped out, because things have been built, but haven’t been paid for. So payment disputes can have very tangible, real impacts on home owners.”

Easton also explained that the disputes are costly for builders, but clients eventually end up wearing the extra costs. “I worked as a CFO for 10 years. Almost a third of our staff were spending up to 60% of their time doing this invoice approval process and payment claim administration, which was very, very expensive. Somebody has to pay for it, we had to pass that cost on somehow, and it ends up in the job cost.”

He could see that the evolution of mobile phones into hand-held computers, and cloud computing provided a solution.

“I took the spreadsheet that basically everyone in the industry uses in some shape or form, which is usually being passed back or forth via email or the post, and put this spreadsheet on the cloud, and allow both parties to have access to it.”

Progressclaim.com has been trialed by development giant Mirvac, and Built, a construction company with annual turnover of more than $1 billion. The software was released to the market in January this year.

Built is rolling out Progressclaim.com to all its building sites across Australia. Emma Shipley, CFO at Built, says the software increases collaboration and efficiency. “We’re already using Progressclaim.com and have noticed in some projects a 40% saving in time.”

Easton described his initial vision for the software. “When I conceived of this, it was really the small to medium-sized businesses I had in mind, because they are 98% of the construction industry. There is genuine frustration and pain out there than can be simply solved. It’s affordable. The smallest player can take advantage of our software. And they can remove that pain point.”

The software is already attracting interest from large government developers and from overseas. This Australian innovation could have a bright future.