Any contractor will tell you, their business revolves around jobs. There are many factors that have to be considered when trying to track and analyze the performance a job. Most of all it is important to ensure that the jobs you perform end up turning a profit. This can be difficult to do if you do not have a system where you can effectively track and monitor your jobs. All contractors do have some type of method in place but it may not be the most efficient. Construction accounting software is by and far the most efficient way to track your jobs and make sure that they are all profitable.
Two ways companies try to manage their jobs are with either a paper-only approach or through Microsoft Excel. Some use a combination of both. Unfortunately, there are some real disadvantages to using this approach.
DISADVANTAGES
All over the place: Unless there is a comprehensive cataloging method in place, it can become very difficult to find certain information about a particular job. There is so much information that it makes it difficult to properly store and keep track of all of this in either Microsoft Excel or through paper alone. It may become necessary to hire additional staff to help keep track of everything.
Inaccurate information: If everything is done manually, then you will likely have some inaccurate information. Human error is inevitable—but you increase the odds of mistakes happening when you rely solely on individuals to manage every aspect of a job. There may be typos, incorrect calculations, and misplaced information. These can all throw off the ability to effectively track and manage a job.
There is another more effective and cost efficient way to track and manage your jobs. Construction accounting software is a great tool to help you stay on top of your jobs.
ADVANTAGES
All in one place: The main advantage to using construction accounting software to track jobs is that all of the critical job information is in one place. You can generate AIA bills if need be. Track spending in inventory, labor, material, etc. All of your critical job information is within the system and only a couple of clicks away.
More accurate information: No longer will there be a need for someone having to use a calculator to manually track how much of your budget has been used for labor.
Construction accounting software does that and so much more automatically. Simply type in some information and items over labor or material are automatically calculated and reported back to you.
Change orders: Change is a part of business. That is particularly true for construction jobs. Construction accounting software is able to manage and keep track of all change requests and change orders. You can create Change Order proposals from within the system and organize them by date, job, or customer. With all of your change orders in one central location, contractors won’t have to worry about performing work that goes unbilled. Once the Change Order is created in the system, it can be added to the AIA with a simple click of the mouse.
Budget it your way: Construction accounting software allows you to create your budget in any way you choose. You can budget it in dollars, hours, units, by cost, or by cost type. Now, with a paper-only approach, you can do this but it will take more time and more manual work to get done. With construction accounting software, all you have to do click through sorting options. All of the job information is already in the system. You can track your cash flow in real time. As you are working a job, you have the ability to see how much of your committed dollars have been spent thus far. You can see how much you are spending on labor. Track whether you ordered too much or too little of a certain material. Forecast how many dollars you’ll need to complete the job under budget and much more. This allows you to make necessary changes on the fly. Also, if you already use estimating software, that’s fine too. Many construction accounting platforms integrate with many estimating programs. So, all you would have to do is import your budget into the software.
Extensive reporting: By far one of the biggest advantages is the reporting features construction accounting software offers. Elaborate reports on almost every aspect of the job can be obtained. Now it is possible to get reports on your open jobs, WIP reports, Details Costs, Stock Slips, and more.
In order to properly track your jobs, there are many tasks that must be completed. Construction accounting software helps you streamline those tasks—transforming an hours-long process into one that takes minutes. The amount of time saved by using construction accounting software allows you to free up staff to work on other important tasks. Imagine just how much more efficient a company can become. ■
About the Author: Eric Goldstein is the president of C/F Data Systems. With over a quarter of a century of experience in the construction software arena, Eric has led C/F Data’s ongoing development of the company’s flagship solution, STRUCTURE, a leading construction accounting platform. C/F Data Systems also develops and sells integrated project management and job-costing software. For more information, visit www.cfdatasystems.com.
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Modern Contractor Solutions – October 2016
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