Since many construction companies typically have more than one job underway simultaneously, it can create logistical nightmares for the accounting teams who need to manage, coordinate, and divvy up the funds necessary for each individual project. With so many moving parts involved in a single construction project, it can be difficult to keep track of every expense, invoice, and cost.
Your Budget Isn’t in a Silo
As the country continues to amble through its slow but steady economic recovery, so too has the construction sector pulled itself out of the nadir of the recession. According to Construction Executive, nonresidential construction grew at a 12.4 percent year-over-year rate through September 2015. Meanwhile, single-family construction expanded by almost 13 percent through July, reaching its highest level since December 2007.
Although the industry has just begun returning to its pre-recession highs, most of these gains stem from firms that trimmed operations to become leaner and more agile. Although many companies are turning a profit, the margins are still tight and this is leaving little wriggle room for inefficiencies or waste.
Further, the global economy is beginning to slow as China faces its lowest growth rate in nearly 20 years, and Canada––the biggest trade partner with the U.S.––slips into a recession. In light of these recent developments, many construction firms might find themselves struggling to expand. In this economic environment, it's more important now than ever that construction firms utilize every tool at their disposal to stay within budget.
Keep your eye on the budget (even when times are good)
The sheer amount of information that construction companies need to administer budgets requires an immense commitment of time, manpower, and funds.
Someone has to capture all of the data, then organize and store it, and finally analyze it to produce a flow of reports and documents. During this long, convoluted process, it's almost guaranteed that not only will the construction firm end up paying for duplicative and redundant processes, but information will get lost.
Data management systems cost construction companies significant amounts of money even when times are good, and when inaccuracies or mistakes inevitably arise, it ripples throughout the entire enterprise. In addition, the usage of outdated and modular single point solutions means, more often than not, the distinct departments that comprise a construction company are cut off from each other and unable to share the necessary data required to make accurate on-the-job financial decisions.
Stop coming up with creative solutions. Start using solutions built for you.
The actual construction phase of any project should not have to include creative budgeting solutions. Field teams often cannot wait for someone back at the office to respond to an urgent request for additional resources to purchase new materials or take on a much-needed subcontractor. The job's foreman is already busy with supervising subcontractors and maintaining a high quality of work, and if this individual is also tasked with locating ways to trim expenses or shuffle around capital to pay for unforeseen expenses, it will detrimentally affect the finished product.
With so many moving parts involved in a single construction project, it can be difficult to keep track of every expense, invoice, and cost.
In a situation like this, either the field team ends up finishing the job without the necessary tools or the job runs considerably over budget, either of which can seriously damage the construction firm's reputation and/or the project's profit margins. Worse, these late-stage changes lead to cost overruns that will be felt throughout the entire company.
As noted in Alabama Construction News, ensuring that all departments and team members have real-time access to data and are actively communicating with each other remains a key objective for construction firms. Nowhere is this open communication more important than in the way the accounting team deals with other departments.
Rather than filling out paperwork and having it processed later by support staff, implementing a single platform that disseminates real time access to all accounting information to all team members allows everyone to accurately forecast project costs, and provides the construction firm with solid insight into the financial impact of every project.
Utilizing the best tool
Procore is the only comprehensive cloud-based project management platform that integrates with the accounting system Sage 300 CRE. Construction firms now have the ability to seamlessly synchronize each individual job from Procore's directly with Sage 300 CRE, thereby ensuring all financial data, vendor information, and project information is available to each team member in real time.
This integration eliminates the costly and time-consuming need to manually duplicate invoices and expenses, thereby boosting profit margins. In addition, by connecting Procore with Sage 300 CRE, construction firms have the unique ability to make more precise price estimates, thereby ensuring the company reaps the full financial benefit of all future projects.
See how Procore helped Vicano Construction: