Take control of your business with end-to-end construction software that provides the insight you need to make better decisions.
Economists' opinions about the current and future state of the construction industry vary. But all contractors will likely agree that the game has changed. Construction business management demands constant attention and insight. Productivity is key. Businesses must do more with less. And it's important to be equipped to handle the fierce competition faced on every bid opportunity.
The newest realized truth: In order to compete in today's market, construction business owners must monitor every aspect of business from bid-to-cash in order to manage with accurate data, cut and control costs, streamline operations and improve cash flow and profitability.
In many construction businesses, the various functional areas that comprise the bid-to-cash cycle (estimating, accounting, and project management) operate in their own silos and use specific software to address their individual needs. The challenge with using disparate software applications across an organization is that they often do not integrate with each other, which results in duplication, lack of communication among departments, inaccurate data for decision-making, delays in processes, no true job costing, obstacles to maximize profitability and more.
Today's savvy construction business owners are implementing complete business-management software solutions that address the entire project lifecycle, which allows end-to-end control of the business. With a complete solution for estimating, job cost accounting and project management, construction business owners have a seamless system to hone business strategy for better decision-making.
Optimizing the Processes of Your Construction Business
To succeed in today's competitive marketplace, you must reduce waste, uncover lost opportunity, expose shortcomings and maximize resources.
Streamlining processes is a good first step. When processes are duplicated and cannot interconnect, three problems occur: data entry redundancy, increased mistakes and the inability to analyze data across functional areas. Implementing a single software solution to be used for all processes will help conquer these obstacles.
A complete solution allows one-time data entry, so that the information captured during takeoff and estimating flows through to accounting, project management and beyond. Team members are able to eliminate redundant data entry, which can be extremely time-consuming and cause errors. Errors and omissions negatively impact job profitability and can cause costly mistakes. When data is entered once, not only has considerable time been saved, but owners can minimize risk and manage with accurate information and.
When using multiple systems to manage processes across the business, contractors are limited in the ability to determine why the business or a specific job has not produced the profits that were originally anticipated. Trying to uncover the reasons is often nearly impossible when data is not centralized or shared across the business. However, using a complete solution, owners are kept informed with timely and relevant business data and reports in a concise format, and they can easily analyze data to understand what is impacting the bottom line.
Increasing Visibility
A complete solution also provides construction business owners with a wide and deep visibility into every aspect of jobs and operations from beginning to end. Throughout a project's lifecycle, an owner can see a day's profit potential at a glance, identify and prevent potential financial losses, spot discrepancies and errors and manage projects with accurate information in real-time.
An all-in-one solution provides all data in one place so that accountants, controllers and owners can gain strict control and flexible processing of the company's financial obligations. Having accounts payable, general ledger, project costing, payroll and purchase orders in a seamless system ensures that commitments and payments are processed efficiently and accurately. The ability to access critical information at a glance makes strategic information readily available for important analysis and allows complete control of financial and project performance.
Of critical importance, true job costing will be available to the owners. A complete solution allows contractors to track jobs, identify variance items that affect budget and/or schedule and anticipate problems in time to resolve them.
Owners wearing many different hats may not have the time to sift through various systems for the data needed or compile reports from multiple departments. With real-time information all in one place, a complete solution offers powerful reporting with easy-to-read charts and graphs that offer a valuable snapshot of critical data.
A complete solution also allows at the capacity to turn on a dime, which helps to compete on bid day and during job progress by issuing change orders, both efforts that can dramatically improve profit margins. This full visibility is critical when the market is so competitive and every minute and every penny counts.
Improving Cash Flow
Providing end-to-end control and streamlined processes, a bid-to-cash solution can be the single most valuable investment a construction business owner can make because it can help improve cash flow. For most construction businesses, it is not uncommon to experience a significant lag time between when work is completed and the time a bill is generated. This lag time can cause work to slip through the cracks. With a complete software solution, these processes are streamlined and work is invoiced and paid more quickly.
Cash outlay for projects can also impact a company's cash flow significantly. The availability of detailed cash flow reports by project enables owners to quickly see the jobs that are being funded by the customer versus which jobs are costing the business and how. Using a bid-to-cash solution, owners can easily see which project managers are making sure the cash is coming in fast enough to fund the job versus which project managers seem to have jobs with lagging payments. It's also easy to see which estimators produce bids that ensure the customer is financing the project (and those which demand a risky outlay of cash for the labor and materials). This data is critical to optimally control cash flow.
It is also essential to have a clear understanding of work-in-progress to increase profitability. By being aware of current jobs and prospective projects in the sales pipeline, construction business owners can better understand resource restraints or problems that can drastically affect cash flow and ultimately the company's profitability.
Impacting Business Growth
Construction business owners must optimize processes across all business areas to gain or maintain an increasingly important competitive edge. Critical, to that end, is timely and efficient communication and information access among estimating, job cost accounting and project management teams. To achieve this heightened productivity, owners can invest in a complete construction software solution to manage business from bid to cash. Additionally, with broad and deep visibility into every project, owners can hone business strategy and improve control of cash flow.
In today's challenging marketplace, a complete construction business management software solution can help businesses better manage with real-time accurate information, improve efficiency and productivity, reduce and control costs, and confidently increase profitability on every project.
Reap the Rewards
A single construction software solution has all the capabilities to perform the following functions:
- Perform accurate takeoffs (digital or digitized)
- Determine costs for materials, labor and equipment
- Prepare detailed estimates and proposals
- Negotiate on bid day
- Keep projects on schedule and on budget
- Compare budget against pending and posted costs
- Identify and issue change orders to capture additional profit
- Manage equipment utilization and maintenance
- Guide employees in office and field
- Have insight into financial data and work-in-progress reports
- Simplify construction billing, payroll, procurement, reporting and more
Construction Business Owner, October 2010
