Why AI Is Now Key to Our Trade Partner Strategy

Thanks to an aging workforce, the pandemic disruptions, and the rollercoaster of inflation and interest rates, finding good trade partners is tougher than ever for homebuilders. It’s even harder for custom homebuilders, because quality is the most critical thing that we do. You can’t just substitute one sub for another. 

That’s why Thompson Custom Homes has made trade partner relationships a key part of our business strategy. We focus on mutual trust and loyalty, which ensures that the high-quality subcontractors want to work with us—which, in turn, keeps our projects running smoothly and ensures happy customers. It’s a virtuous circle. 

Our strategy is simple: We are careful and deliberate in how we vet trade partners and how we work with them. We treat them with respect. We are fair and open. We don’t backcharge for little things, but instead focus on finding solutions that work for everyone. 

Most importantly, we pay our subs on time—which is how AI became a critical part of our trade partner strategy. 

Thompson Custom Homes has been building handcrafted homes for more than 20 years—work for which the company has been recognized on multiple occasions, including receiving 11 Best In American Living awards. 

Photos: Thompson Custom Homes

Automating a Highly Manual Accounts Payable (AP) Process 

It started in 2020, when the market picked up and the subcontractor shortage went into overdrive. We wanted to take all of the friction out of our payments process, which had been paper-based, manual, and unchanged for almost 20 years. Project managers (PM) drove back and forth from the back office to sign off on invoices and again to enter in the data. The process was time-consuming and inefficient, to say nothing of the momentum lost every time the PM left the job site, or when a vendor had to wait days for us to dig through paperwork to answer an invoice question. 

The breakthrough came when we discovered Stampli, an AP automation platform, and its AI assistant, Billy the Bot. Billy now performs many of the repetitive tasks that used to be manually handled by Vanessa, our AP specialist. This includes transcribing the data from invoices, coding them to the right general ledger (GL), routing them for approval, and checking for duplicates or fraud. 

Image: Thompson Custom Homes and Stampli

A lot of people are surprised that we let AI perform such sensitive financial tasks. It’s important to point out that Vanessa validates everything Billy does. The data that Billy populates are simply suggestions that can be overridden by our staff. We’ve come to trust Billy to get it right more than 95% of the time; it’s usually the edge cases that require human intervention. 

You may hear stories of AI taking people’s jobs, but our experience has been quite the opposite. Billy has freed up Vanessa to take on more value-added tasks like financial strategy and cash flow management. Most importantly, the time and effort to pay trade partners has plummeted. 

Three Challenges to AI in AP 

To find the right technology, we had to overcome three hurdles. 

1. Finding an AP provider that met our needs. I won’t name names, but one of the biggest firms in the space lacked functionality that homebuilders need, such as the ability to apply specific cost codes. I finally found Stampli when I started Googling specific functionality related to construction and homebuilding. 

2. Integration. We didn’t want to have to rework Quickbooks Desktop (QBD) in order to support third-party software. Stampli was able to match the configuration of QBD in a way that didn’t require us to change our GL, cost codes, or approval processes. Billy the Bot played a part here, too: it analyzed and extracted the coding rules and approval workflows of all our old invoices, so we didn’t have to spend time programming logic into their system. 

3. The project managers (ie, what we expected to be our biggest hurdle). Over the 20+ years we’ve been in business, we’ve seen more than one technology project fail due to resistance from the field. However, Stampli won them over with its ease of use, and the PMs instantly realized that they’d regain 3-4 hours a week that they’d spent driving to and from the office. They took to it right away—one training and they haven’t looked back. 

How AI Changes Trade Partner Relationships 

The benefits extend across the business. Simple invoices that once took days now process in hours. Trade partners are paid promptly thanks to round-the-clock automation. Cash flow disruptions are avoided, keeping subs loyal and projects on budget. Project managers increase productivity with their extra 20 hours per month. Homeowners see faster completion times and refer us enthusiastically to new customers. And Vanessa can leave the drudgery behind to focus on value-added analysis. 

We’re already scoping out more ways to extend AI through the business. Because when it comes to quality custom homes, the blueprint requires world-class subcontractors. And for us, AI helps cement those vital relationships now and into the future.

Erin Day is the business manager at Thompson Custom Homes.