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5 Minute Read
As a contractor, quick, accurate job costing is critical to the success of your business.
Effective job costing compares what has been budgeted for your project in the estimating processes with actual costs as they occur on the project. From materials to equipment to subcontracts and vendors to the largest expense on most construction projects — labor, contractors typically track jobs costs by phase codes or cost codes. If you’re a heavy highway or civil contractor that deals with significant amounts of materials, you may use unit-based job costing or time and materials billing methods to measure your project’s actual versus estimated costs.
The closer to budgets that you can keep your project costs, the better for your bottom line. But that can be hard to do when the data collected is not hitting your project managers’ desks in real time.
Identifying potential miscues, project risks, necessary project changes and additional costs with traditional job costing and project management processes, often meant that projects were moving into new phases before issues or problems were identified. If problems were large enough, that meant having to perform costly rework — sometimes at the expense of the contractor.
However, technology has changed the face of business worldwide, with data, workflows, financial transactions and much more being managed in the cloud. The process automation, real-time data algorithms, mobile accessibility and more that the cloud provides is reducing typical data and workflows processes from days or even weeks down to mere minutes.
This is why so many contractors have already moved to the cloud. Being able to not just retrieve, but process and analyze project data in real time, means that project managers, owners — entire project teams — can now see the results and accurately measure costs as they occur.
With modern technology comes new, modern expectations, plain and simple. Project owners expect your projects to be run efficiently, and they want accurate, timely progress reports. In fact, more and more contracts are being drafted requiring contractors to have modern construction management software or solutions that can provide real-time data and reporting. Similar requirements are becoming more common with government issued projects as well.
For you too as a contractor, a modern, connected construction management suite that leverages real-time data and cloud-based workflows has significant benefits. Not only are your field and back-office teams working from the same set of real-time data to keep project workflows moving, but you can spot issues and potential risks much faster, allowing you to act immediately. This can save your projects — and your project teams — significant time and money lost due to rework after the fact.
Furthermore, stronger data collection and assessment tools allow you to analyze your projects to uncover areas for continued improvement, help you better project future projects and close the profit fade gap that has long impacted the already razor-thin profit margins of so many construction firms.
Finally, your business continuity goes beyond just job costing. As the COVID pandemic has shown us, companies that were agile and able to pivot during lockdowns and new stringent safety procedures endured far less business strain than those without support of modern technologies. Having a cloud-based, connected construction management solution in place can empower all project stakeholders to adapt to changing business conditions, as well as properly scale your operations to meet future demands or meet the next unexpected challenge.
Don’t just take my word for it. Read about how one contractor, Advanced Technology Group, frustrated with the job costing paper chase and disconnect between its office and field teams, moved to the ViewpointOne suite of cloud-based connected construction solutions in order to become a more data-driven organization.