Categories
Accounting Industry Insight

How to Create a Cost-Plus Billing for a Construction Project

Last week, we shared the ins-and-outs of progress billing through the use of a schedule of values. This week, we’ll be focusing on cost-plus billing.

Whenever possible, many contractors prefer to use cost-plus contracts for their construction projects. These contracts help reduce the contractor’s risk, as the customer will reimburse them for most of the costs incurred during the project. This even includes unforeseen issues and overruns; they’re the customer’s problem, not the contractor’s.

While the lower risk is certainly attractive, put together an air-tight cost-plus invoice can be a challenge. Contractors have to track all of the costs incurred during the billing period, mark them up by the percentage specified in the contract, and supply supporting documentation to send along for review. The data collection and entry alone can take hours, and a small mistake can make a significant impact on the contractor’s bottom line.

Premier Construction Software takes the pain out of cost-plus billing, offering a one-stop solution to contractors to create invoices and save time.

What is a cost-plus billing?

Creating a cost-plus invoice might be important business, but the basics of what a cost-plus invoice is are actually quite simple. A cost-plus invoice will contain a collection of all the costs incurred by a contractor on a project. Generally speaking, these are direct costs such as materials, labor, and possibly mobilization costs. These costs are accounted for (with proof in the form of receipts, timesheets, invoices, etc.) and then marked up by a percentage specified by the contract.

The total of the invoice will always depend on the costs incurred on the project within the billing window. So, if a particular billing window is heavy on subcontractors, vendors, and materials, the invoice can be significantly higher than a lighter billing period. This is different than progress billing, where contractors base invoices on the percentage of a project’s completion. 

Another difference from progress payment invoices is that invoices for cost-plus billing are much more involved. Where progress payments may require photographs of completed or signatures from inspectors, cost-plus billing require hard documentation. Every cost, from materials invoices to timesheets (even parking costs if the contract specifies), needs to be collected, accounted for, and proven to the customer. In other words, documentation is everything.

Because cost-plus contracts have the potential to run wildly over budget based on materials chosen and unforeseen issues, customers are typically very discerning about which costs they’ll cover. Leaning on a Premier Construction Software’s document management system ensures everything is in order and accounted for.

How to calculate a cost-plus billing

The first step for a contractor to be successful under a cost-plus contract is meticulously detailed record keeping. This includes documenting labor, equipment rentals or purchases, materials, and any other costs related to the project — direct and indirect. Any of those costs within the billing period need accounting. 

Contractors need to log each of those costs into Premier Construction Software’s accounting system to ensure the contractor can charge for them when it’s time to bill. They also need to consolidate any separate ledgers, time logs, or job cost entries with the job. Any cost accidentally left out or forgotten comes directly out of the contractor’s profit. 

With all costs accounted for and documented, Premier Construction Software’s auto-generate tool can gather all of those costs into one neat, easy-to-understand, project-specific report specific. You’ll have the ability to review each line, and you can mark each cost to bill now, bill later, or never bill (for indirect costs not covered under the contract).

Once you select all of the costs and their billing designations, Premier Construction Software will automatically calculate the invoice. The system will automatically determine the appropriate rate for each man-hour by the labor code. And, you can set the cost-plus billing module to add set percentages for materials markups automatically, taking care of the ever-important profit calculation for the entire bill. 

After you review the invoice, Premier Construction Software will automatically send the bill via email to your customer. Your customer will be able to open the invoice from any internet-enabled device, drastically reducing the amount of time it takes to get paid.

What documents should you include with a cost-plus billing?

General contractor working on his laptop on an AIA application for cost-plus billing

Each project has different billing requirements, including what supporting documents the customer wants you to submit with the invoice. Luckily, Premier Construction Software’s document management system makes it easy.

Most time and material billings will include the following supporting documentation:

Payment application – This form summarizes the contract status and the amount billed. It includes a list of change orders and the amount currently being billed. It is similar to the AIA form G702.

Billing breakdown – This form includes the project’s schedule of values and a summary of the billed amounts for each line item. It shows how much is currently being billed and how much was previously billed for each line of the schedule. It is similar to the AIA form G703.

Transactions list – This report includes a list of all the cost transactions included in the invoice. It allows the owner to review the specific costs before paying the invoice. Premier Software automatically creates this list as part of its cost-plus billing workflow.

Copies of timesheets or certified payroll reports – Customers may also want to review copies of your employee timesheets showing the hours worked on their project. 

If the project is prevailing wage, you may also have to provide certified payroll reports. These reports list all the employees on the project, the hours they worked each week, and certify that they were paid the correct wages and benefits.

Copies of accounts payable invoices – Many project owners and banks will require copies of vendor and subcontractor invoices as additional proof of these costs. Premier Software can automatically attach these invoice copies to the email that goes to the owner or your customer. The owner may also request lien waivers or releases as proof of payment for previous payment applications. 

Reap the benefits of cost-plus billing without the drawbacks

Preparing a cost-plus bill for construction projects requires a keen eye for detail. Being able to put your finger, or mouse, on every receipt and timesheet that applies to a project will ensure you aren’t leaving money on the table. And, the faster and more accurate this process is, the better. 

Using Premier Construction Software’s document management system with the cost-plus billing module will streamline your billing process. You’ll be able to create accurate invoices instantly, free from missed line items or forgotten costs. And, with electronic signatures, you’ll even reduce the amount of time it takes to get paid.

If your team struggles with assembling cost-plus billings, let Premier Software show you a simpler, easier way. Get in touch with our team today.

Automate your cost-plus billing process using Premier Contstruction Software

Categories
Tips & Advice

How General Contractors Can Stay Organized and Generate More Leads in 2021

With the new year brings time for professionals in the construction industry to review business processes and efficiencies. That being said, it’s safe to say that there’s a lot of room for reflection as a result of unprecedented challenges faced in 2020 that have impacted the way we all work. In particular, for general contractors, it is a time to analyze what worked and what didn’t to ensure best practices are in place moving forward. Much like every transition from year to year, contractors should reflect to revamp their organization and lead generation techniques. Using these tips will help contractors start the new year off with not only peace of mind, but also with a plan to confidently move ahead in 2021.

Organize Your Office Space

With every project, making sure your business has a solid foundation from which to expand is the key to success. Perhaps your construction team has moved to a semi-remote or flexible arrangement, and ensuring everyone is on the same page and project management practices are being upheld is key. You and your assistants should set up your home offices appropriately so that you have a dedicated space away from distractions. If your home is not suited for an effective office space, you may want to consider a mini-renovation. When renovating a room in your home, it could be beneficial to invest in a home warranty to preserve the most essential home appliances amidst the renovation process. Investing in a home office is well worth the benefits. Your team might even feel more comfortable and more productive while working out of their home.

Once you have your home office set up to your liking, keep it organized and clutter-free. To stay even more organized, opt for an electronic cloud platform to keep everyone on the same page and save headaches. It is also essential that distributed teams are not working in silos and have access to vital job resources such as business purchases, invoices, and job site information at all times.

Use the Most Efficient Software

Laptop displaying a dashboard for a construction job

Having the most efficient construction software at your disposal will help your business stay more organized in comparison to your competitors. Having an organized office space is just half of what it takes to be as efficient as possible. Without the right software, itemized data can get lost in the mix, leading to hardships that are easily avoidable. Certain construction software systems provide a diverse range of organizational features from accounting all the way to time and compliance tracking.

The best construction software systems have all of their features in a cloud-based solution. Such software provides a wide range of different industry practices such as reporting, document management, time entry, forecasting and more, all in one solution. Some handy specific features include job costing and accounting. A job dashboard feature displays real-time KPIs for project managers to assess the status of projects, instead of developing a report. With built-in accounting features, accountants can create live financial reports for multiple groups while saving time and energy. Leveraging the advanced features of construction software gives you vital time back into your schedule to work on more customer-facing responsibilities.

Manage construction projects with the job dashboard in Premier

Be Attentive to Customers

A crucial aspect of generating leads in the construction industry is being as attentive as possible. To simplify, this means always answering your phone. Answer with a purpose and show the caller that you truly care about them and what they have to offer. Doing this will make the customer feel like a priority and will be a step in the right direction in how your business is perceived.

Another way to show your customers that you care is by returning quotes in a timely manner. Understandably, contractors are very busy and ultimately, the client is waiting for you, and all they can think about is their job. Being honest with quote prices and being rapid in response can not only help the client with a quick turnaround, but can also lead to potential referrals down the road. Lastly, to show your appreciation for the customer, consider sending a thank you note showing your appreciation for the business opportunity. Hopefully, over time this will lead to impressive reviews and meaningful relationships.

Stay Busy and Keep Your Costs Down

An important part of being a contractor is to stay busy with the right jobs for the right money. Some contractors tend to overshoot when going about their business. This can often lead to an overwhelming feeling and missed opportunities. Although taking on large, lucrative projects is desirable, it can cause you to be burned out, and smaller guaranteed opportunities can slip away.

Keeping your schedule full for a reasonable rate will not only lead to consistent income but will also lead to an improvement in production. Fundamentally, smaller jobs can often lead to larger jobs. If you show consistent communication skills and honesty about the project, clients will remember that. There are a variety of ways for contractors to save money, but the most effective ways are using a cost-efficient fleet, buying quality equipment, and renting your most expensive gear.

Be Open to New Ideas

It seems that almost every year social media grows much faster and larger than in previous years. Social media can be a great way to strengthen the community and can also be a landscape of learning and can lead to new project opportunities. Be open to new ideas and find more innovative ways to do your job. Finding innovative ways to do your job can help separate yourself from some of the more traditional contractors.

Use social media to your advantage; it can be a great way to learn new ideas about the business, but can also help market your business. Creating a social media presence that is constantly up-to-date, attractive, and shows previous customer reviews can be the most influential. Having established social media pages that customers and clients can easily access will drive more revenue by creating a space that is organized, reliable, and known for quality work.

Conclusion

To conclude, 2020 was a challenging year full of twists and turns that forced contractors to do things they’ve never had to do. Having the ability to plan out ways to generate revenue and gain new clientele is one way to prepare for what 2021 throws your way. Use these tips to attack 2021 with a sense of purpose.

Categories
Industry Insight

Billing in Construction: Progress Billing via Schedule of Value (SOV)

When working on a long-term construction project, contractors often use progress billing to keep cash flowing during the project. Progress billing involves requesting funds for the portion of the work that has been complete. It is usually based on a percentage of the contract. Most project owners require a breakdown of the work on the project, showing the progress on each line item of the breakdown. This is called a schedule of values and is used by most contractors when they are billing long-term projects.

We’re going to look at what a schedule of values is, how it’s used, and how to create one.

What is progress billing and a schedule of values (SOV)?

Construction companies bill projects based on the progress of the job via a schedule of values. A schedule of values lists every billable item on the project along with the subsequent dollar value of that task. Typically progress billings are submitted monthly, but complicated projects may require more frequency. A project manager enters in a % completion or amount for each item as they progress on the project. This routes to the architect and owner for approval. Once approved, the accounting team generates an AR invoice from the progress billing to ensure accounting and job costing are always in sync. The SOV is a valuable tool in the evaluation of percent complete on a project as well as a management tool for the billing process each month.

What is the typical breakdown of a SOV?

In the United States the industry-standard format for a billing schedule of values is per AIA form G703. General contractor accounting issues are common, so it is essential to establish a good schedule of values early on. Typically, a contractor discusses with the client how the schedule values should be broken down. Creating this schedule of values prior to the beginning of a project is beneficial to everyone because it then becomes part of the signed construction agreement. It’s important to verify that the sum of all line items should equal the total contract value.

A schedule of values looks similar to a requisition form and should list the items and scheduled value followed with the amount previously billed, amount billed this period, materials presently stored, total completed & stored to date, % complete, balance to finish, retainage. A construction contract will typically require that “Retainage” be withheld from each application for payment in order to provide the Owner or lender protection from the Contractor not completing the entire project. Additions to the contract can be listed separately below or in some cases, clients prefer for them to roll into the cost items listed above.

sample schedule of values generated from Premier Construction Software

What is a schedule of values used for and by who?

The cash flow of a construction project is determined by the schedule of values, which is why it is the main document used for monthly payments. The schedule of values also evaluates how the project is progressing according to plan and whether the percentage is on point to where everything should be with the amount of money that has been spent at that time.

Many contractors prefer to collect as much of their money upfront as possible, which is why they’re always tempted to front-load the schedule of values.  The experienced architect and owner will not allow this front-loading, and will try to more accurately identify the proper values of each line item on the SOV.

While a general contractor will use the schedule of values continuously throughout the project, it is always also available to architects and owners. For most construction projects, the architect has an essential monthly task: reviewing the contractor’s application of payment. That means that they can see how well the construction project is progressing, if everything is on schedule and on budget, and see if there are any changes that they can make to improve their results.

Financing companies may also request a schedule to use for their own internal breakdown of loan funds. The schedule helps the lender reconcile the project draws to the total loan package. The lender must ensure that the contractor is not overdrawing specific line items, so they use the schedule of values to track the progress of the draws.

How to complete a schedule of values

The first step in creating and completing a schedule of values is to list the phases or activities of the project that are related to your work. Enter the scheduled value for each phase. Once you’ve assigned accurate values to all the items, add up the amounts to ensure that they equal your total contract amount. If there’s a discrepancy, review your calculations to find any errors.

Typically, the schedule or actual costs determine how much can be drawn for each phase of the project, it’s important that the information provided is as accurate as possible. Enter in the % or amount each month and generate the progress billing application and AR invoice.

Conclusion

Schedules of values are important documents in construction projects. They are used to bill the project and to show the progress of the work. Banks and owners use them to reconcile their financial documents and ensure that the project loan or funds have not been overdrawn.

Creating a schedule of values involves breaking the project down into phases or tasks that can be used to show the progress of the project. Each phase or task is assigned a value and the total of all the items matches the contract amount. Project teams rely on the accuracy of the information shown on the schedule to determine budgets and payment amounts.

To learn more about how Premier Construction Software can help you streamline your billing process, get in touch with our team for a personalized demo today.

Author Biography:

Dawn Killough is a construction writer with over 20 years of experience with construction payments, from the perspectives of subcontractors and general contractors. Dawn has held roles such as a staff accountant, green building advisor, project assistant, and contract administrator.  Her work for general contractors, design firms, and subcontractors has even led to the publication of blogs on several construction tech websites and her book, Green Building Design 101.

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Ultimate Guide

Ultimate Guide to Lien Waivers

Any way that you cut it, lien waivers are an essential gear in the construction machine. They help keep the vehicle moving towards its destination and promote an atmosphere of fair play. They also pop up at several points and from several angles throughout the life of a project, so they require some special attention to handle them correctly.

But, what are lien waivers? How do they work, and what do they do? Who needs to be familiar with them? How do you manage them?

Those are great questions. This guide aims to answer all those questions and more. Having a solid lien waiver-centric foundation can make a big difference in protecting your business, project, client, or reputation.

What is a lien waiver?

If you don’t have much experience with lien waivers, you’ll need a bit of a primer to understand what they are. A lien waiver is a form exchanged during the payment process on a construction project. This form states that the owner will pay a certain amount of money for work performed on the job. In return, the form states that the subcontractor waives their rights to a lien in the amount specified.

If that sounds complicated, here is an easier way to understand lien waivers: consider them a receipt. It’s a document that proves a subcontractor received payment for the part in a project. Because the sub received payment, they agree that they will not file a lien against the property.  

Lien waivers are like going to a shop. You paid for the goods, so you expect to have a receipt to show the loss prevention clerk at the door. Without that receipt, you could find yourself in hot water even if you paid full price for the goods.

The Trouble With Lien Waivers

For such a simple “I pay you, you don’t sue me” premise, lien waivers can be very tricky. This might seem hard to believe, but subcontractors don’t line up to give away their lien rights. Likewise, owners don’t enjoy paying people before they know they won’t turn on them. It’s dicey territory to navigate.

Before most subcontractors will sign a lien waiver, they want the money in the bank. Before most owners and general contractors will cut a check, they want a lien waiver. Someone has to take the first step in good faith. 

The truth is that lien waivers can actually help speed up the payment process and keep things on an even keel. The trick is to find the right balance between risk and reward. Using the correct type of lien waiver can help.

Types of Lien Waivers

As with anything construction related, one form of a document is never enough. Instead, lien waivers come in two main forms (conditional and unconditional) with two subtypes (partial and final). 

Conditional Lien Waivers

Conditional lien waivers are the least risky lien waiver for subcontractors, making them easier for an owner or general contractor to get a sub to sign. A conditional waiver states that a subcontractor will waive their right to file a lien for the amount set for in the lien waiver only once the general contractor or owner issues payment.

Conditional lien waivers go into effect once the subcontractor gets paid. If they don’t receive payment, they still have lien rights. It’s a fair way to make sure that everyone gets what they deserve. The subcontractor gets paid, and the owner receives a project free of liens.

Unconditional Lien Waivers

Unconditional lien waivers are much riskier for subs and can be difficult to get them to sign. Unlike conditional lien waivers, unconditional lien waivers go into effect the moment the subcontractor signs them. This means that the subcontractor gives up their right to the amount specified in the lien waiver immediately, whether or not they received payment.

Unconditional lien waivers are great for owners as they’re property receives lien protection regardless of what payment issues might arise. If a subcontractor signs an unconditional waiver and then has a problem getting their payment from the general contractor, it’s no longer the owner’s problem. This can quickly become an unfair environment for doing business, so it’s not the recommended waiver form.

Subtypes: Partial and Final

Both conditional and unconditional lien waivers break down into two subtypes: partial lien waivers and final lien waivers. They’re fairly self-descriptive, but for clarity’s sake, let’s address them.

Partial Payment Lien Waivers

Throughout the course of the project, progress payments will come due and subcontractors will submit payment applications. These payment requests will include set amounts that the sub is expecting. The owners may require a conditional or unconditional lien waiver before paying that amount, protecting them from liens in the amount specified by the payment app.

Partial lien waivers can be a bit tricky for subs when retainage or change orders are part of the equation. In the spirit of good business, owners and general contractors can include an area for exclusions within the partial lien waiver. Otherwise, subcontractors could waive their right to lien — accidentally as it may be — to the progress payment’s portion of the retainage.

Final Payment Lien Waivers

As a project comes to a close, subs will start lining up for their slice of the pie. Owners and general contractors can request conditional or unconditional final payment lien waivers in order to cut checks. 

Final lien waivers include everything unless otherwise noted on the lien waiver. Again, this is an opportunity for a sub to note that the lien waiver doesn’t apply to retainage or change orders. Owners will have an easier time getting these forms signed if they provide an exclusion section where the sub can note this. 

Who should be concerned with lien waivers?

There are several parties on a project that can be involved in the lien waiver process. The following are some typical roles that deal with lien waivers regularly. 

The Subcontractor

When a subcontractor signs a lien waiver, they’re giving up almost all of their leverage. That means there’s a lot at stake when it comes to lien waivers for the subcontractors. Subcontractors need to pay close attention to the language in any lien waiver they sign. Also, if a lien waiver is a requirement on a project, the subcontractor should know ahead of time so they can include one with their payment application to speed things up.

The Materials Supplier

They don’t get a lot of mention, but materials suppliers have as much at stake as contractors when it comes to payments. If a project requires lien waivers from subcontractors, materials suppliers will likely have to supply them as well. The same rules apply when it comes to lien waiver language: suppliers should look them over carefully and include them with an invoice if they’re a requirement.

The General Contractor

Among many of the headaches that general contractors deal with, collecting lien waivers falls right in the middle. On most projects, the act of collecting lien waivers from every party involved falls on the general contractor. They’ll have to get lien waivers from their subs, their subs’ subs, their subs’ subs’ materials suppliers, and so on. It’s the general contractor’s job to know who’s working on the project and to ensure they receive a lien waiver from everyone.

The Office Staff

As mentioned earlier, lien waivers can flow continuously during the life of a construction project. Materials suppliers might include them with every invoice. Subcontractors will submit them with their progress payment applications. General contractors can walk into a construction trailer with an armful towards the end of any project.

Most of the management involved in lien waivers falls on the office staff. Copying, uploading, and filing a project’s lien waivers can take hours. Factor in the time spent making sure that every contractor sent theirs, and it can take up a lot of staff-hours to organize lien waivers. 

The Property Owner

When it comes to lien waivers, there’s some irony involved with property owners. The lien waiver is an instrument that protects the property, yet the property owners are usually the least involved.

While there is the “that’s why I hired a general contractor” argument, owners should still concern themselves with lien waivers. Ensuring that the general contractor has a system in place to account for and collect lien waivers is essential. And, anytime payment requests make their way to the owner’s desk, they should be locking in on receiving lien waivers. 

Comparing requested amounts to the waivers received will help ensure no one misses their payment and files a lien against the property.

Managing Lien Waivers with Construction Software

It’s quite obvious that there are many parties involved in a construction project that need to deal with lien waivers in one way or another. Managing all that paperwork can be daunting and can cost a firm quite a bit of time and money in the meantime. Premier Construction Software can be the key to managing your waivers effectively.

Automatic Lien Waivers

Using a construction software program to track and generate your lien waivers can make a huge difference. You’ll be able to send and receive lien waivers in real-time, and best yet, automatically.

When you generate a check with Premier’s Print Check option, the system will automatically generate a lien waiver. The waiver will be pre-populated with the correct information for the payee, the payment amount, and the language you set ahead of time.

At this point, you can send your lien waivers electronically through email to receive instant authorization or print them to distribute with paper checks.

Consistent Language

In most cases, there are no regulations requiring specific forms or languages for lien waivers. Because this incredibly important document is mostly unregulated, many companies create lien waiver forms on the spot. This from-the-hip waiver generation can lead to inconsistency in your AP forms and systems.

When you generate a lien waiver with Premier Construction Software, you’ll have a consistent, tried-and-true form that you can replicate time and time again. Even if you’d prefer to hire a construction lawyer to draw up lien waiver language that’s both rock-solid and fair, you’ll only have to do it once.

Knowing what your lien waiver states without having to dig each individual form out of a filing cabinet can help straighten out murky situations before they become a problem. 

Tracking Lien Waivers

Whether you’re a general contractor, office manager, or property owner, you need to keep all of your compliance data in one place. Referencing one program for budgets, change orders, and lien waivers ensures that you won’t miss anything. 

Construction management software can track your lien waivers to show you which waivers received authorization, who signed them, and when. With a few clicks, you can check to see if any lien waivers or other compliance documents are missing so you can take action.

Remove Human Error

Any process with as many moving parts as lien waivers is susceptible to costly human-generated errors. Instead of leaning on your office staff with data entry and filing the lien waivers across several projects, you can take the burden off of them with Premier Construction Software.

Not only does Premier make lien waivers a more efficient process with alerts for missing compliance documents, but it can also help handle other accounts payable processes. Creating and sending invoices, automatic holdback and retainage release, and generally faster billing processes make Premier an invaluable tool for your firm.

Final Thoughts

Lien waivers are essential, but they can be a bit complicated to handle. With the sheer number of waivers involved in a project, ensuring that everyone is on the same page can be challenging, to say the least. 

Moving your accounts payable process over to a reliable and feature-rich construction software programs will help you streamline your lien waivers process. You’ll be able to generate, send, receive, and track your waivers with far less effort. You or your staff will be able to shift time and energy to other tasks while ensuring everyone gets paid and no one needs to file a lien.

For more information on how you can manage your lien waivers with Premier Construction Software, you can schedule a personalized product demonstration here.

Author Biography:

Tom Scalisi has over 15 years of experience working in the trades. Since moving to full-time freelance writing, he has developed a passion for helping construction companies grow. He enjoys teaching contractors how technology can streamline their businesses and educating them about their rights during payment disputes. 

Categories
Tips & Advice

How Investing in Construction Software Will Save You More Money in the Long-Run

Once upon a time, construction projects were managed by hand with pen and paper. The construction industry has since evolved to be heavily centered around and contingent upon the use of technology, and it continues to evolve as technological advances make it possible to manage and complete projects more efficiently, saving businesses money in terms of both time and resources.

Every construction project consists of a number of different processes, with a team of project members and stakeholders responsible for various aspects. Even a small project can have hundreds of moving parts, as well as numerous construction documents that need to be managed, stored, and shared. Without the right organizational tools, clear communication, and close oversight, things can get out of hand pretty quickly and result in budget overruns and schedule delays.

Construction management software provides the tools and structure to help you more effectively manage all phases of a construction project, from initial planning to closeout—but not all construction management software offers the same benefits. In a recent blog, we outlined the key differences between a cloud-based vs. on-premise solution. In this blog, we’ll dive deeper into how a cloud-based, SaaS solution will save you more money in the long-run.

No Extra Costs

One of the biggest advantages of a cloud-based solution is the immediate cost savings, which ultimately translates into long-term cost savings. On-premise systems require a large initial investment because of the server hardware, software licensing, deployment, and IT support staff. In addition to the large upfront investments, on-premise solutions require ongoing maintenance to the physical infrastructure, in addition to the time required to perform routine software maintenance, back-ups, and updates. With a cloud-based, “pay as you go” model, all of those costs are eliminated. Everything is saved on the cloud, updates and maintenance are handled by the service provider, and all you have to do is pay a subscription fee.

Efficient Resource Management

One of the most fundamental aspects of successful project management is understanding how much time and resources are required to complete various tasks. This information is not only important for monitoring current projects but also provides critical insight that helps project managers more accurately forecast future projects. Construction management software offers time tracking capabilities that give project managers the ability to constantly monitor progress, and to see exactly how much time and resources are being spent on each individual task to ensure resource management is optimized.

Streamlined AR Billing

The construction industry utilizes several different types of billing methods, and sometimes there may be multiple payment methods required for one project. Because of this, knowing how much to bill clients, and when to bill clients, can be tedious to track—especially considering most companies have multiple projects occurring simultaneously. Construction management software can take the guesswork out of your AR billing by streamlining the entire process, saving you valuable time, while also providing a higher level of accuracy than manual entry.

Automate your cost-plus billing process using Premier Contstruction Software

Less Paperwork

Paperwork can be a huge pain—and a huge cost—in the construction industry. Construction documents can be hundreds of pages long, making it a cumbersome job to manage manually, especially when you consider the number of changes and revisions that are made throughout the entire process. Construction management software not only saves money on paper and ink by providing one centralized location to store all construction documents digitally—which also means you’ll never have to worry about losing a document again—it also saves a huge amount of time by updating documents in real-time to ensure everyone has the most recent version at their fingertips. And with a cloud-based solution, you’ll have the added benefit of unlimited storage.

Organizational Performance Improvement

Construction management software can help you improve organizational performance by providing detailed reports with the information you need to make better, faster, and more informed decisions. With a number of different reporting options and a customizable dashboard, project managers can easily view high-level KPIs, pending items, approvals, as well as cost and revenue summaries, each with full drill-down capability.

Conclusion

Running a construction company and ensuring its ongoing profitability is no easy feat, but investing in construction management software is well worth the cost in the long-run given its ability to save you time and money in so many different ways.

To learn how Premier Construction Software can meet your company’s specific needs, click here to schedule a personalized product tour.