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Industry Insight Tips & Advice Ultimate Guide

Construction Software: Why Startup Businesses Should Invest

As a startup, one of the most important investments you will make is selecting the right type of software for your construction business. Instead of purchasing multiple systems that only offer partial solutions, it pays to invest in an all-in-one platform that will grow with your company. In this article, we’ll look at what kind of software construction companies need, which software is best for construction companies, and why you should invest in construction software. 

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Industry Insight Tips & Advice Ultimate Guide

Economics of Construction, Post-Covid

As more and more states relax pandemic restrictions, the construction industry is beginning to return to normal. All be it a new normal, as contractors continue to struggle with material shortages, higher prices, and a labor shortage. Still, most economists predict that construction will continue to rise throughout 2022.

Looking at 2022, I would say I’m nervously optimistic. Nonresidential construction, by and large, seems to have passed the low point and is on an upswing.

– Ken Simonson, Chief Economist for the Associated General Contractors of America

With the passing of the infrastructure bill, many large federal projects are expected to go online in the 3rd and 4th quarters of 2022, giving a much-needed boost to the industry.

“I think that 2022 is going to be very busy for you all,” says Anirban Basu, chief economist for Associated Builders and Contractors and CEO of consulting firm Sage Policy Group. “Think very long and hard before you enter into contractual obligations. Make sure you build enough margin and contingency.”

Basu predicts a rise in state and local spending on construction going forward, including school construction. Contractors will need to ramp up their operations to handle the influx of available work.

“I think, to be successful, it’s going to help to be bigger,” he says. “Significant technologies are more expensive, and recruiting costs are significant, and training costs are significant. It’s nice to have a larger line of credit and more bonding capacity to go after some of these large-scale projects that are coming down the pipe, whether in infrastructure or other segments.”

The continued increase in volume can be tied to the effects of the pandemic both on the industry and the general population. “The impact of COVID has been far from equal,” notes Global Construction Perspectives director Mike Betts. “In most countries it’s been negative but in some, it’s been positive as working from home has encouraged people to invest more in their homes.”

This investment has led to a steady recovery for the industry over the past year and a half.

Continuing challenges

However, we aren’t out of the woods yet. Many contractors are struggling with the residual effects of COVID shutdowns that occurred two years ago. Workers and building materials are hard to come by and are more expensive than they were before the pandemic began.

Labor shortage

The construction industry continues to struggle with bringing new talent to the industry. The perception of construction jobs as dirty and physically demanding may be a part of the problem, along with the societal view that students graduating from high school should all want to seek a college education. The fact is that college isn’t for everyone, and construction careers can be performed by anyone given enough training. Most journeymen tradespeople get paid more than their college-educated friends and don’t have the tuition debt to show for it.

In the industry, there were 345,000 unfilled jobs at the end of November 2021. That was actually down from October when openings hit an all-time high of 455,000, but up from 261,000 a year earlier, a 32% jump, according to the Bureau of Labor Statistics.

One of the answers some companies are pursuing is the adoption of technology. Today’s young workers grew up with technology, so they are more comfortable with it than past generations. Contractors are recruiting young workers to help with scheduling, estimating, and project management, which most companies use software for. Upcoming tech for virtual reality, drones, robotics, and building information modeling (BIM) is driving the surge of young people to the industry.

Supply chain issues

A combination of production and shipping delays and rising material prices has created a problem for contractors on current projects. Production stoppages due to the pandemic and trucking and shipping disputes have caused project delays and price increases.

“The good news is we are starting to see factory output come back to close to where it was prior to the pandemic,” Richard Branch, chief economist at Dodge Data & Analytics said. “That should help the supply side, and if we start to see some improvements with the log jams at ports, perhaps by the backside of 2022, we might see some reprieve from these higher prices.”

“I’ve gotten more optimistic about material prices,” Simonson said. He doesn’t expect them to return to pre-pandemic levels but anticipates more up and down volatility, which is better than the upward swing many material prices took through 2021.

Some contractors dealt with the material shortage by stockpiling materials they used on a regular basis. Unfortunately, this is exacerbating the current supply crunch.

Some of it is a shortage, and some of it is shipping, but some of it is still a little bit of fear, where people are buying products to try to protect themselves. That’s driving up the demand, which does not help the overall industry.

– Deron Brown, President & COO of U.S. Operations for Edmonton, Canada-based PCL Construction  

Experts don’t see supply chain issues being resolved completely until sometime in 2023. Contractors need to keep this in mind and be proactive with purchasing to ensure project timelines are met.

Positive outlook

Overall, it appears that the construction industry is set to continue its rebound. Contractors are learning to deal with shortages in labor and materials, and these will continue to be problematic. Adopting technology, like project management software, can attract younger workers and make systems more efficient, reducing company overhead costs.

For more on how Premier Construction Software can help your company, request a free demonstration.

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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Features Industry Insight Tips & Advice Ultimate Guide

Are Project Management Solutions Really the Solution?

When shopping for construction project management software, it can be difficult to determine if it’s best to go with a standalone service or an all-in-one that includes accounting. Both have their pluses and minuses, and a lot depends on how you run your business and the size of your staff.  

Premier Construction Software provides an all-in-one solution for your project management, accounting, and financial data needs. And while standalone PM solutions may look attractive, they really create more work than they save. Here are some of the features that Premier provides that standalone products don’t. 

Real-time cost data 

Some standalone project management solutions sync data with the accounting software at the end of the day or when told to manually. So, the data that is represented in the PM solution can be hours or days old. Project managers can’t be sure that they are looking at the latest and greatest information unless they sync the data themselves. 

With Premier, project managers have instant access to all cost and budget data and details as soon as it’s entered. This includes updates to project estimates when budget change orders are approved. The software automatically updates the budget and creates progress billing lines. Project managers can be confident that the information they have, even when accessed on a mobile device in the field, is accurate and up to date. This helps them make better decisions about the project to keep it on schedule and on budget. 

 

Access to all financial data 

Some standalone solutions provide only general information about costs, such as subtotals by cost type or grand totals. Managers can’t drill down into the data specifics because not all the data is shared with the PM solution. 

Premier’s financial data isn’t based on what one program does and doesn’t share with another. All of its information comes directly from the source, allowing project managers to get the information they need, including details and documents. They can look at all costs for a cost code and type and determine if a transaction has been coded correctly, ensuring that costs are properly allocated. Using the forecasting module, PMs can account for unanticipated costs and request internal budget transfers to keep the project on track. 

 

Custom billing forms 

Some solutions provide standard billing forms (like the AIA G702 and 703), but there isn’t much flexibility. Or they only provide templates for generalized invoices. Companies have to create their own invoice templates outside the system to meet their client’s needs. Then that information has to be entered into the accounting software, creating two sources for original data. This double-entry can lead to costly errors. 

Premier’s customized billing forms allow you to design just the form you need to match your client’s requirements. This flexibility allows you to present your billing the way your client wants to see it without adopting a workaround. You only have to enter the data once and have access to all the documents and reports you need to support the billing. Need to make a correction? Instead of a lengthy voiding process, our software allows you to quickly make one-click edits and simple invoice reversals. 

 

Detailed reporting 

Some standalone solutions only receive summary cost data from the accounting system. The export of data doesn’t include detailed information or images of documents to help users research issues. If a problem or question comes up, workers must look at multiple sources to find the information they need. 

Premier offers the ability to drill down to specific transactions and get all the information you need to solve a problem or answer a question in just one platform. Reports can be customized to provide as much, or as little data as is necessary. From generalized summary reports to detailed transaction reports, PMs can get the level of information they need to keep their projects on budget. This allows project managers to quickly get the accurate information they need to manage the project and make key decisions. 

 

Equipment and inventory cost integrations 

Some standalone PM solutions don’t support inventory or equipment cost and revenue tracking. Most companies choose to track these separately in a spreadsheet or by hand as a workaround. This can lead to potential mistakes and inaccurate cost and revenue data. 

Premier’s integrated equipment and inventory modules provide tracking, costing, and purchasing tasks that help ensure the accuracy of billing and cost data. You can track equipment-related expenses and assign mark-ups by the hour, day, week, or month. It also enables you to track historical supplier pricing and assign custom billing prices with custom mark-up codes. This ensures your company gets the revenue it deserves when using its own inventory and equipment and lets you know when it’s time to invest in new equipment or purchase more inventory. 

Automation 

Some PM solutions offer little or no automation of tasks. In addition, because data must be entered into the accounting system and the PM system, they require double the amount of work to keep data accurate in both systems.

Premier allows automation of routine and repetitive tasks, like repetitive invoice entry and automatic pay when paid payments. In addition, when an approved change order is received, the software auto-generates progress billing lines and creates and emails subcontract and purchase order change orders to subcontractors and suppliers. This saves workers time and creates workflow efficiency. 

And now for our verdict…

Premier allows contractors and subcontractors to get the real-time data they need to the level of detail they require, provide custom billing forms, track equipment, and inventory expenses and revenues, and take advantage of automation to increase productivity and efficiency. For more information or a free demo, invest in your business and contact Premier 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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Industry Insight Tips & Advice Trends & Technology Ultimate Guide

Demand VS Supply in the Construction Industry

The current state of the construction industry is one of challenge. Contractors are in incredibly high demand for renovations, new home builds, and other projects. They’re poised for serious growth, except for one thing: There aren’t any affordable materials.

 

Demand VS Supply: What happened?

The pandemic caused a wild amount of demand for contractors and a shortage of materials. In the past, whenever either condition existed, it has pushed the price of building up. In today’s construction industry, it’s pricing both contractors and prospective project owners past their affordability breaking point.

Contractors are in High Demand

Contractors are in such demand because people want change. With so many folks leaving large cities for greener spaces, or so many working from home and needing a new environment to look at, contractors can’t answer the phone fast enough. These customers want to build new homes, renovate fixer-uppers they purchased in the country, or simply spruce things up a bit. And most of them want to hire a contractor to do it for them (keep “most” in mind).

Building Materials are in Short Supply

But, with materials manufacturing taking a massive hit during the pandemic, there just aren’t enough affordable materials around. With government imparted shutdowns, social distancing requirements, and a general lack of staffing across all industries, the amount of lumber hitting the shelves isn’t what it used to be. And, for the contractors that are able to find materials, they’re extremely expensive.

Workforce Shortages

For materials that aren’t necessarily in short supply, such as stone in the domestic mountain used for building products, or materials waiting at sea to be unloaded, the issue is a workforce shortage. With so many people choosing to remain out of work, material production can’t ramp up. And, there’s a lack of qualified truck drivers to move the materials that are produced. 

DIYers Played a Part

Consider this interesting point: DIYers caused some of these headaches as well. With so many people staying home instead of taking expensive vacations, many decided to tackle renovations and fixer-upper projects on their own. They headed down to the local home center or lumber yard and strapped studs and joists to the roof of the family sedan. This one group may have been responsible for the apparent disappearance of pressure-treated lumber in 2020, as new deck builds are a favorite of DIYers.

Governmental Impacts

Let’s not discount the effect that the government has had on the situation. The Biden administration imparted an 18% tax increase on softwood lumber coming into the US from Canada. Also, tariffs on concrete shipments from Japan are making a challenging scenario even worse. 

Issues for the Construction Industry

This chain of uncanny events is doing one thing: Making construction of any sort more and more expensive. Materials that were once affordable and readily available are typically neither anymore. 

 

  • When it comes to wood, the cost of 1,000 board feet of lumber nearly quadrupled over the course of the pandemic. It’s since dropped, but it’s far above pre-pandemic pricing.
  • The availability of concrete hasn’t changed much, but the demand and suppliers’ ability to move it to the job site has: There are fewer qualified drivers yet more places to deliver it to, causing a rise in price.
  • The cost of steel has been steadily increasing, forcing the price of fabrication and commercial construction to increase accordingly. Some estimates have the increase of steel mill prices as high as 141%. 

 

How To Overcome (or Avoid) These Issues Moving Forward

For many contractors, the time or ability to avoid the supply chain issues caused by the pandemic has passed. However, there are some ways they can avoid the impact these issues can have on their bottom line. 

Job Forecasting

One way to plan for current expenses is to use effective job forecasting methods. By utilizing data compiled from past projects, contractors are able to predict how much a project will cost. While spikes in materials costs do minimize this methods’ effectiveness, the longer the heightened costs occur, the more accurate forecasting will be.

This method requires more than just reviewing old invoices. Utilizing software designed specifically for contractors allows for in-depth analysis of spending, materials costs, labor, and other costs associated with certain projects. The more data collected, the more accurate the report.

Establishing Credit with Multiple Materials Suppliers

A more effective way to mitigate the impact of skyrocketing materials pricing in establishing lines of credit with several suppliers. Many contractors prefer to work with a select few suppliers, but this limits their ability to shop prices and material availability. What the supplier has is what the contractor gets.

While it’s true that many suppliers work off the same supply chain, everyone has a trick or two up their sleeve. Consider a contractor who ordered materials but the job fell through. Potentially, those materials are sitting in one particular yard, which means only one supplier will have access. If a contractor who needs those materials doesn’t regularly deal with that supplier, they may never locate those materials. 

That’s a specific instance, but one that isn’t uncommon. Access to materials often depends on who a contractor knows, which can make establishing accounts with several companies critical. For contractors that worry too many accounts will make accounts payable a nightmare, a solid construction software solution can automate and streamline payments.

Contract Clauses

While no contractor wants to adjust the terms of their contract or back out on a deal, it’s sometimes necessary. Including clauses in a contract that put the onus on the customer might be the best way to protect their bottom line.

For instance, such a clause might state that once a material increases over a certain percentage (which must be established in the contract), the customer will be expected to pay the additional costs. The customer then has the opportunity to sign or pass on the contract. If they sign, the contractor has some reassurance that price increases won’t derail their project or their company’s profit margin.

Hard Times Call for Smarter Measures

Things are tough right now. Though contractors might not be able to take full advantage of the demand for their services, with a few smart moves, they can still grow. The cost of materials may never reach pre-pandemic prices again, but contractors that analyze their established data, diversify their supply chain, and create safer contracts have a better chance of making it through the worst of it. When materials do begin to drop again, they’ll be in the position to fake full advantage and grow. 

Premier construction software is a cloud-based accounting and project management construction software

Check out Premier Construction Software to see if it fits your company’s strategies and goals.  Our construction management and accounting software provide teams with the tools they need to take advantage of these technologies. Schedule a demo by contacting us today.

We’re more than just construction financial software. We’re built to help your business.

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. 

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Tips & Advice Trends & Technology Ultimate Guide

Enhancing Construction Roles With All-in-One Software

Successfully taking a construction project from an idea to a finished product requires the precision of an orchestra conductor. With so many moving parts required to make the job a reality, a single point of reference that everyone can look at to make sure they’re in rhythm. While a conductor’s baton works for the band, all-in-one software does the trick for a construction company.

But, what is all-in-one software, how does it work, and what are its benefits? We’ll discuss those points and how all-in-one construction software enhances the roles of construction personnel in this article.

What is an All-in-One Construction Software Solution?

Construction is somewhat of an old-school industry, though many contractors have adopted business and project management software over the years. These programs take a specific task (or set of tasks) and streamline or automate them for the contractor. The problem is that many contractors use several types of software, and they don’t always play nicely together. All-in-one software solves that very problem.

All-in-one construction software allows contractors to keep all of their most important tasks, documents, plans, and processes under one application. Instead of running three of four different types of software or apps, transferring and updating data, and creating separate spreadsheets to organize it all, an all-in-one software program can handle it all.

In practical use, all-in-one software allows construction personnel to stay organized and updated. For example, when an electronic change order is accepted, the job’s overall budget might change automatically. Or, when sending an electronic RFI, access to the drawings affected will accompany it. And, any change on the project will automatically update job costing reports, making sure that the project is still on course. 

For many contractors, those tasks fall under different software programs or even hard copy filing systems. Some companies aren’t even using software designed specifically for the construction industry, meaning they aren’t benefiting from tailor-made solutions to streamline their business and boost their profits. All-in-one software does it for them. 

How an All-in-One Software Solution Can Enhance Roles

With so many different facets to all-in-one software, the folks filling different job titles within a construction company can all benefit in different ways. The following are some specific examples of how this centralized software can enhance many roles within a business.

Owners/Executive Board

At the highest level, all-in-one construction software is all about information and transparency. For a smaller company, this solution provides the owner with real, hard numbers that they can take to a bank for financing a project or a potential partner looking to buy into the business. With an up-to-date outlook on the company’s current projects, profitability, and even assets, making big moves that will propel the business forward is much easier.

For an executive board, all-in-one software contains everything they need to make important decisions. Current data and job profitability on large projects can be challenging to collect, but with one program managing it all, the job becomes much easier. Should the board need to make important decisions, present information to shareholders, or make a decision regarding the company’s trajectory, the data is at the board members’ fingertips.

Project Management

Project management is a stressful role, and anything a company can do to streamline it for their PMs goes a long way toward enhancing the role. 

Collecting all of the reports a project management team might need under one solution has many benefits. First, since all of the data, values, and documents update automatically, they’re more likely to be looking at the latest, most accurate data. This allows them to make clear decisions in less time with more accuracy.

Also, the project management team can set up customized workflows that will automatically send data and documents to the folks who need to see them. This allows the PM team to shift their focus from distributing and collecting the latest documents and drawings and putting that focus on the job at hand.

Design Professionals

For design professionals, electronic approvals and drawing management can make a huge impact on their workflow. Without all-in-one software, changes in drawings can be challenging. While emailing a document isn’t so difficult, getting a signature required to move forward often requires hand delivery—a workflow annihilator.

With electronic approvals and drawing management, designers can send documents for review and instant approval. Decision-makers can open these documents from any mobile device, review them, and approve or reject them in real-time.

At the same time, RFIs sent to designers for changes in materials or layout are just as easy. The designer can open the request, review the document, pictures, or drawings, and quickly give the okay or offer another solution. This alone helps keep the project on track.  

Finance and Accounting

There is possibly no role in a construction company so inundated with reports and data than the finance and accounting department. These folks are constantly watching the line items, profitability, accounts, and more, and trying to keep them up to date. With all-in-one software, much of that data collection is automatic.

Consider this scenario: A change order occurs and the subcontractor is now submitting a payment application that’s significantly higher than expected. Without all-in-one construction software, this will throw the budget for a loop and leave the accounting staff scrambling to find where the money is going. 

For a team equipped with an all-in-one solution, that change order would have updated the budget automatically. This gives the accounting department the information they need to justify the budget and make decisions moving forward. And, for any decisions requiring approvals, automatic workflows can send these documents and retrieve electronic signatures in real-time.

Field Personnel and Subs

When it comes to building the product that the project owner will actually see, field personnel and subs are the folks for the job. To ensure they’re building exactly what’s expected, up-to-date drawings are an absolute must.

Centralized drawing management offered by an all-in-one solution enables them to instantly check that they’re working from the most updated drawings. Rather than someone driving to the office and grabbing a copy of the latest drawings, these documents are now available on any mobile device.

And, let’s not discount the savings in delays. Confusion, discrepancies, changes, and shortages all have their ways of bringing a project to a standstill. Rather than workers and subs sitting idly, instant RFIs, electronic approvals, and real-time change orders improve communication and keep the project on task. While delays are inevitable, these features lessen their impact and keep the budget intact.

Project Owners

Project owners rarely have access to management software of any kind, however, they do see the benefits. Working with a construction company that uses an all-in-one system means better communication, smarter decision-making, and a feeling of being more involved. Making the project owner part of the workflow or sending documents that require approval helps the owner feel involved, leading to a better overall experience.

The Benefits of an All-in-One Solution Spread Company-Wide

Regardless of the project participants’ role or function, all-in-one software can streamline and simplify their job. Between instant approvals, streamlined organization, and drastically improved communication, these applications can change the way a company runs. And, as a result, increased profitability is a reality.

Check out Premier Construction Software to see if it fits your company’s strategies and goals.  Our construction management and accounting software provide teams with the tools they need to take advantage of these technologies. Schedule a demo by contacting us today.

We’re more than just construction financial software. We’re built to help your business.

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.