Why your business can’t afford to wait on cheques: Insights from a construction group’s payment overhaul

Payment processes in the construction industry tend to be paper-based and manual. Even when dealing with thousands of business partners, subcontractors and suppliers, payments were typically made by cheque.

Lian Beng Group experienced this first-hand. Until a few years ago, every payment across its more than 20 subsidiaries was made by cheque and signed off by authorised signatories.

“On a construction site, there are many subcontractor trades, such as piling, mechanical and electrical, carpentry and steel works – each of which is a separate entity requiring individual payment. Every month, we had to sign thousands of cheques, one by one,” explains Lian Beng executive director Ong Lay Koon, who heads the group’s Accounting and Finance departments.

However, its transition from corporate cheques to e-payments – in an initiative to complement government policies and carried out in partnership with UOB – has helped to not only streamline payment processes, but also transform the operations of the construction, property development and investment holding company.

“This shift from cheques to electronic payments has significantly reduced processing time, operational costs, human errors and risk of fraud. On the digital banking platform, I am able to review the list of pending payments and approve the transactions in batches,” says Ms Ong.

“This helped our team save time and effort, allowing us to focus on other important aspects of the business.”

Singapore’s suite of e-payment solutions gives Lian Beng the flexibility to pay its stakeholders according to their specific needs. For periodic and high-value payments, the company uses GIRO (General Interbank Recurring Order), FAST (Fast and Secure Transfers) or MEPS+ (MAS Electronic Payment System). Smaller ad-hoc payments are made easily through PayNow.

“Processing cheques was a highly manual and time-consuming activity for both ourselves and our counterparts. Having the flexibility of various e-payments allows us to process our payments in an efficient manner, which benefits both Lian Beng and our stakeholders,” adds Ms Ong.

Adopting e-payment solutions also enables greater traceability, with clear visibility of recipients, when a payment was made and other key information such as the time and date of transaction. For companies like Lian Beng, which have multiple subsidiaries and payment accounts, going digital with its transactions also helps the company gain better visibility and track its overall business operations.

Ms So Lay Hua, head of Group Transaction Banking, UOB, notes, “We are committed to working with businesses to digitalise their payment processes with secure, flexible and scalable solutions. Through our suite of electronic payment tools, companies like Lian Beng can better streamline operations, improve cash flow visibility and enhance productivity.

“Our solutions are designed to meet the varied needs of businesses across different industries, including for recurring payments, urgent transfers or contractual obligations, all while equipping our clients to be better prepared for the future.”

E-payment now the preferred option

Ms Ong estimates that 95 per cent of all their transactions are done via e-payments. While some transactions may specify payment by cashier order, these are relatively rare.

As local banks are

phasing out the issuance of SGD-denominated corporate cheque books

by the end of this year, e-payments have become the more convenient and widespread payment option across all sectors of the economy. Furthermore, from Jan 1, 2027, all banks will stop processing SGD corporate cheques.

Customers of Singapore’s Domestic Systemically Important Banks (D-SIBs) now have two additional options to pay digitally:

Electronic Deferred Payment (EDP) and EDP+

. These solutions allow payers to make deferred payments instead of using cheques, for instance, to fulfil certain contractual requirements.

While Lian Beng has yet to use these new payment options, which were rolled out in July this year, Ms Ong does not rule out that it might be used in the future, depending on the requirements of its business partners.

After the initial effort of onboarding all their counterparties onto e-payments, the vast majority of Lian Beng’s subcontractors and suppliers now prefer to receive payment electronically.

“Instead of devoting time and resources to processing and safeguarding cheques, they can now use their time more effectively, with payment processed digitally,” says Ms Ong.

The move to digital payments, she adds, has sped up transactions across Lian Beng while reducing the administrative load on her team. “I have not signed a single cheque this entire month,” she says with a smile.

Visit

The Association of Banks in Singapore’s website

or speak to your bank representative to find out more about e-payment solutions, including the newly launched electronic deferred payment solutions.