The quest for speedier payment bedevils many businesses but those in the construction trades might suffer even longer lags. 

Their invoicing and accounts receivable systems are critical – but many older financial platforms used in building trades don’t provide for modern payment and accounting options, according to Payra, a software startup that automates accounts receivable operations.

Payra’s software integrates with most enterprise resource planning (ERP) platforms that are designed to help “blue collar” industrial companies modernize their cash collection functions.

Last month, Payra announced a $15 million investment from Edison Partners, an investment firm, to help speed its growth. While that’s the first and only fundraising event for the company so far, Payra has ambitions to transform payments in the construction industry.

The startup’s services aim to assist construction and building materials suppliers in accepting digital payments like cards and ACH, and to automate the reconciliation inside their legacy finance systems that often lack API (application programming interface) connections.

Via artificial intelligence-enabled technology, a payment “is actually now incorporated into my system of record, like the pacemaker of my business, and that largely, not to use too much hyperbole, wasn’t really possible before,” co-founder Thomas Cecil said last week in an interview. 

“The magic for [companies] is that they’ve been basically told for the last 20 years, ‘Hey, you can accept credit cards, but you’re going to have to just figure out what that ties to,’” Cecil said. 

Multiple companies provide accounts receivable automation products, such as BillTrust, Growfin and Versapay. Payra says its solution integrates with nearly every legacy ERP platform, even those nearly 30 years old, without requiring contractors to make large investments to replace their existing systems.

“The vast, vast, vast majority of these businesses, they’re on ERP systems the general public probably hasn't heard of, so the challenge is working with what they have in place versus pitching them a rip-and-replace strategy,” Cecil said.

The company – founded two years ago in Nashville, Tennessee – focuses on larger general contractors, such as commercial concrete, lumber, heating, ventilation and air conditioning and electrical trades. 

The 14-employee company relies primarily on direct sales for growth and the Edison investment will aid expansion, Cecil said. The Edison investment was Payra’s first outside capital after being "bootstrapped" by the founders, co-founder and CEO Riley Lovingood said during the interview. 

“The biggest piece is alleviating a lot of the friction and making a general contractor have to go through hoops to pay somebody,” Lovingood said. “We’re providing more access to make it easier for them to pay…straight from the invoice on their phone, on their computer, right there.”

These companies generally operate with legacy ERP systems and not retail-oriented software, such as Intuit’s QuickBooks, Lovingood and Cecil said in the interview.

Lovingood is a former staffer for U.S. Senator Bill Hagerty, a Tennessee Republican. Cecil, a serial technology entrepreneur, is Payra’s head of product.

Most companies in the space have no means of capturing payments or data from their paid receivables and integrating it with their finance functions, even if they can send invoices with electronic payment links, Cecil said. 

Many of these firms still navigate paper invoices, paper checks and spreadsheets to manage their receivables, said Lovingood.

Payra makes money from a percentage of its transactions, the co-founders said. Payra’s credit card payments average $3,500, but “it was not weird for us to see credit card transactions north of $400,000,” Lovingood said.

Payra targets companies that are dominant in their region but still fragmented as their industries haven’t consolidated heavily, Lovingood said, noting as an example the 12,000-company U.S. ready-mix concrete industry.

“They each dominate a circular radius between where the plants are because it’s a perishable product, you can’t ship concrete,” he said. “It's very fragmented or balkanized. Everybody sort of has their own territory.”

Payra considered using Stripe or PayPal Holdings’ Braintree enterprise payment solution within its business, but found them unworkable for its needs, Cecil said. “You can’t do that in this business because the tickets are so large that the risk controls of those modern processors will pend the payment or block the payment,” he said.