When managing your business, it’s important that you stay on top of everything, including the little things. Because, eventually, missing the little things can add up in lost revenue—a lot of revenue. Construction Accounting Software can help not only manage the big tasks but also the smaller tasks that are critical to your business. Two areas to look into are Purchase Orders and Change Orders.
PURCHASE ORDERS
Let’s first start with Purchase Orders. As many know, a Purchase Order or PO is a document from the buyer agreeing to pay the seller for a product or service. Almost every contractor uses Purchases Orders for their business. Most Construction Accounting Solutions come with a built-in Purchase Order system and there are many advantages to using it.
Maintain budget. Without an efficient Purchase Order system in place, it’ll be really easy to overspend on projects. One of the biggest advantages is that with Purchase Orders you can gain more control over spending and set a budget. With Construction Accounting Software, all Purchase Orders are tracked and each purchase is applied to the budget you set. The ability to set budget limits is available. So, in the event the limit is reached, the system will send a notification warning the user. At this point, you can make the determination to either exceed the budget or pull back on spending. One can also analyze what went wrong and plan accordingly for future jobs.
Keep track of inventory. Microsoft Excel is good for many things. Efficiently keeping track of inventory is not one of them. Most contractors could have hundreds of materials and equipment in inventory. Keeping all of that information can be a tedious and time consuming process. Errors are also likely. When making a purchase of equipment or materials, the inventory will need to be updated. Having to go back and forth with Excel can prove rather difficult. Construction Accounting Software offers both a Purchase Orders & Inventory system, allowing the two features to integrate with one another, and making purchasing and tracking inventory much easier. So, when you purchase a material, it will automatically add to the inventory stockpile. Eliminating potential errors and increasing accuracy.
More control. With a Purchase Order system more control is granted over the purchasing process. Contractors can put in their Purchase Order terms and sellers will be more than likely to accept or lose out on the business. More control over approving purchases is granted as well. Contractors can also institute a rule that all Purchase Orders must be approved by an individual before they go out. This is a great way to ensure no purchases are made without approval.
CHANGE ORDERS
Another area where revenue could be lost is change orders. Any contractor will tell you that when working on a job, changes occur. Problems are encountered that require contractors to do more than what was originally planned and are common in construction. The issue is making sure that you are being compensated for that extra work. Not having an efficient system to track Change Orders could end up in lost revenue. This happens because sometimes contractors do not keep track of the extra work that is done and do not bill for it. Using Construction Accounting software is one of the most effective ways to prevent revenue loss on unbilled Change Orders.
Stay on top of change orders. The main issue is that extra work performed does not always get recorded. Even when contractors do get a change order, it’s a paper document that can get lost or misplaced. Construction Accounting Software stores all Change Orders within the system so that they will never get lost. It can also keep track of Change Orders that have not yet been approved. One of the biggest advantages of using Construction Accounting Software is that all Change Orders stored in the system are also entered into the Job Cost Module. Contractors can see how Change Orders are affecting the budget of their jobs. Allowing them in the future, to budget and plan jobs more efficiently.
Going mobile. Another challenge is making sure that the signed Change Orders are submitted into the office. Now there are mobile apps that allow contractors to do just that. They can create Change Orders and get signatures from the client while in the field. The moment a Change Order is needed it can be generated and entered into the system. This ensures that all Change Orders are processed and can be billed.
There are so many things contractors have to worry about when running their business. Payroll, Job Cost, Bidding, Inventory, and more. Construction Accounting Software can help make the time-consuming tasks seamless. It is important though to know that Construction Accounting Software can do more than just the big tickets items, it can also manage the small tasks, which is critical because if left unmanaged, the small tasks can begin to eat into revenue. ■
For More Information: Located in Weymouth, Massachusetts, C/F Data Systems develops and sells integrated Project Management, Job-Costing, construction accounting software, STRUCTURE, a leading construction accounting platform. We also developed a suite of mobile apps, STRUCTUREmobile FieldLinc, to supplement STRUCTURE. For more than 38 years, C/F Data Systems has been helping commercial contractors to increase efficiency, improve the business processes, and drive profitability. For more information, visit www.cfdatasystems.com.
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Modern Contractor Solutions – January 2017
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Take Care of the Little Things
