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Tips & Advice Trends & Technology

5 Tips for Successfully Implementing New Software

Implementing new software can be difficult, time-consuming, and stressful. Planning ahead with the employees that will be affected by the change will help everyone feel more comfortable with the process.

The keys to successful implementation of software are listening to your team and maintaining an open line of communication. From there, it’s a matter of being realistic with your goals, starting slowly, and not being afraid to change course when problems occur.

1. Listen to your team

Listening to your team members, especially those that will be most affected by the new software, is vitally important to the implementation process. You’ll want to get feedback regularly from everyone about how the process is going and any concerns they have.

When starting software implementation, listen to your teams concerns and even fears about the process. They may wonder how it will affect them individually, how much additional work they will be expected to do, and who they should go to for help. Listening to these concerns and addressing them in your implementation plan will help build trust and teamwork.

Work with your team to develop goals for the process as well as a timeline for when implementation will be completed. There are several steps involved in implementing a new software program, and you want to make sure you have enough time for each one. Also take into consideration the fact that everyday work needs to continue throughout the implementation process. This may mean that you will need to hire additional help on a temporary basis to keep things running.

Throughout the implementation process and once the software has been rolled out, make sure that you encourage your team to provide feedback. This feedback will let you know how successful the process has been, as well as directing any changes that may need to be made.

2. Provide consistent communication

Be open in your communications to your team. Let them know the good and the bad about the implementation process. Keeping everyone informed will help to dispel rumors and prevent incorrect information from being broadcast throughout the company.

Provide regular updates to your team on the progress of implementation, how you are doing in regard to reaching your goals and the proposed timeline, any setbacks, and any changes that have been made. Being completely honest with your team will continue to build trust and ensure that everyone is on the same page.

3. Be realistic

When setting the timeline for the implementation process, be sure to include time for training and testing the software, reacting to setbacks, and addressing how the day-to-day work will be done while the team is working on the implementation process. Training and testing often take longer than expected, so be sure to include some additional time here. Planning for setbacks and how you will address them will help your team feel more prepared to deal with potential problems.

Goals for the process should be realistic as well. Be sure to start with a small group of employees who will get trained on the software and begin implementing it. Once you see if the test was successful, then you can roll it out to the rest of the company. This testing phase allows you to work out the bugs and develop standard procedures that everyone will follow once it is rolled out company-wide.

Include time for changes or potential setbacks. Not everything will run smoothly the first time you do it. You may find that you need additional resources or need to revise how you’re doing things in order to match the software’s workflow. Building time for changes into your schedule will reduce the stress on the team.

4. Don’t be afraid to change course

During the testing phase, if you find that something is not working the way you expect it to, address it as soon as possible. Start by contacting tech support or your customer service representative to see if there is an answer. If the software can’t address your problem, brainstorm with your team about how you want to handle it. Be open to all potential solutions.

Once the team has provided ideas on how to solve the problem, make a team decision on what your next step will be. If everyone buys in to the next step, it will avoid miscommunication and keep the team more cohesive.

5. Start slowly

When implementing new software, it’s best to start with a small group or one department within your organization. This will allow you to test the processes of the software and learn how to best perform the work. During this testing phase you can make changes to your workflow to improve efficiency.

The test group should work to develop standard operating procedures for the rest of the team. This will help with training the additional members of the team and providing structure for the work.

Don’t roll out software too quickly. Make sure the test group feels comfortable with the processes and the performance of the software, then invite everyone to use the new procedures. The test group can then be the experts that everyone can rely on when they have questions.

Continue to improve

Once the software has been rolled out and everyone is using it, keep the lines of communication open so you can receive feedback from your team about the performance. This feedback will allow you to make changes to your processes, upgrade services, and address potential problems before they become widespread. Continuous improvement in your processes will improve efficiency and accuracy, saving you more time and money.

Change can be scary which is why with Premier Construction Software, our implementation team will be there to hand-hold you throughout the 6-week implementation process. We’ll schedule a business process meeting prior to the start of your training sessions to ensure we fully understand your business needs at the start of the process. When your team is ready to go-live, your team will receive a copy of their personalized business playbook to refer to anytime.

To learn more about how to get started, schedule a call with our sales team today.

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Industry Insight

Compliance Documents You Should Be Collecting from Your Subcontractors

Before you begin working with a new subcontractor, there are several compliance documents you need to collect from them. These documents, like proof of insurance and copies of contractor’s licenses, help reduce risk on construction projects. The documents are often required by the contract with the owner, or the GC may be requesting them as per their own subcontractor agreement.

The goal of collecting these documents is to ensure that the subcontractor will complete the work in the manner specified in the contract documents, and to protect the general contractor and owner from potential costs or damages caused by the subcontractor. GCs want to ensure that the subcontractor will be around to finish the project, will provide quality work, and that they have the necessary insurance and bonds to cover any damages that might happen during the project.

We’re going to look at what compliance documents are and let you know which ones you need to be collecting and tracking for your subcontractors.

What are compliance documents?

Before we get into what documents you need to collect from your subcontractors, let’s take a moment to understand why these compliance documents are important. Compliance documents are documents you request from subcontractors to show that they meet the minimum requirements to work with your company. They help ensure that a subcontractor meets the legal requirements for being in business, as well as any additional requirements your company may have.

Every company has different documents that they require from their subcontractors. Usually, these requirements are contract-driven, so be sure to review their contract for specific requirements. There may also be project-specific documents that need to be gathered. If so they will be specified in the contract with the project owner.

We’re going to start with the essential documents that you should be collecting from all of your subcontractors, and then list some that are optional but may be required.

Essential subcontractor compliance documents

These documents should be collected from every subcontractor on every project.

Contractor’s license

There’s nothing more important than verifying that your subcontractor is licensed to work in the state and city the project is located in. Not all states require licensing for subcontractors, so be sure to check the regulations first. Licensing ensures that the sub has insurance coverage, usually a small bond to cover disputes and claims and that they are registered to work in that state. For trade contractors, licensing also ensures a level of knowledge and education. Once you’ve checked to see if a sub is licensed, make sure the license stays in good standing by regularly reviewing it. This ensures that the insurance policies and bonds remain current.

Insurance certificates or proof of insurance

There are two types of business insurance that all subcontractors should have: general liability and workers compensation. These policies protect the business in case of theft, damage, or if one of their employees gets injured. You may also request proof of automobile insurance if the sub has their own vehicles. Things to look for include ensuring that the policy has not expired and that it has the appropriate claim limits as per your contract. Your contract may also require that your company be added as an additional insured to the sub’s policy, so make sure that is noted as well.

W9 form

All subcontractors should be providing you with an IRS W9 form. This form lets you know the type of company the sub is (corporation, LLC, sole proprietor, etc.), as well as their tax identification number or Social Security number if they are an individual. You’ll need this information for end of the year reporting and sending 1099 forms to those subs and suppliers that qualify.

Project bonds

Some projects, mostly government and public ones, may require performance and payment bonds. Not all GCs ask their subcontractors to bond back the project, but if you do, you’ll want to get a copy of these bonds for your files. You’ll need proof that the bonds were issued, as well as the specific bond information in case you or the project owner have to make a claim.

Optional subcontractor compliance documents

Your company may choose whether to collect and review these documents. If you do require them it should be included in your subcontractor agreement.

SDS / MSDS

Some general contractors require that all subcontractors turn in their SDS (safety data sheets) or MSDS (material safety data sheets) as part of their compliance package. MSDS are required to be on each job site when a contractor uses chemicals or hazardous substances. These are often job-specific as each project requires different products. Subscriptions to MSDS services that provide a website or telephone number to contact to get information can substitute for providing paper documents.

Safety policies

Every subcontractor should have a safety manual or set of safety policies that they institute on their projects. Some GCs require subs to send those policies in so they can be reviewed to verify that they comply with the general contractor’s requirements. Some of the key policies that need to be reviewed include fall protection, personal protective equipment (PPE), silica protection, and health policies. With the rise of the COVID-19 pandemic, ensuring that these policies meet CDC and OSHA requirements has become even more important. All subcontractors need to comply with these requirements when it comes to health checks, PPE availability, and record-keeping.

Keeping it all organized

It’s imperative that contractors track the receipt and expiration of these documents to ensure that their subcontractors are in compliance at all times. GCs should develop a system for verifying, recording, and following up on missing or expired information.

Accounting software packages, like Premier Construction Software, can help by tracking insurance and license expiration dates and providing automatic notification when they are expired. This makes compliance tracking easier by centralizing the data and providing notifications, allowing contractors to be proactive in tracking down information. This helps GCs ensure that their compliance information is up to date, reducing project risk.organizing construction project files with Premier Construction SoftwareTo learn more about how you can streamline your document management process, schedule a call with our team for a live 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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Accounting Industry Insight

How to Create a Time & Materials Billing for Construction Projects

In our final article series covering the main types of billing methods in the construction industry, we’ll be discussing time & materials billing and its key benefits.

Some general contractors prefer time and materials billing, as it shifts most of the risks onto their customers. Any costs incurred come out of the customer’s pocket, not the contractor’s. This format allows them to focus on their profits and concern themselves less with the unpredictable nature of contracting. 

While the time and materials agreements are straightforward, the act of putting together a bill can be daunting. Contractors have to collect all the receipts for all of the materials they purchased throughout the course of the project (possibly with mark-up), account for manpower, and add any support documentation that the customer requests. Factor in time for manual data entry (and the mistakes that tend to come along with it), and the process gets even more convoluted. 

Thankfully, Premier Construction Software provides a time and material billing solution that quickly and easily generates accurate, professional invoices.  

What is time and materials billing?

A time and materials billing format involves the contractor charging the customer for, quite literally, time and materials. The contractor bills for every man-hour spent on the project, as well as for any materials purchased for that job. Labor rates are typically outlined in a simple format in the contract, though these rates can vary depending on the tradesperson working on the project.

On top of the labor rates and materials costs, some time and materials contracts allow the contractor to mark the cost of the materials up a bit. Again, this is something the contract will clearly outline, but it does help the contractor maintain a healthier profit margin. Should the customer decide to use high-end materials, the contractor’s profit will grow accordingly. 

To calculate a time and materials invoice, a contract needs to multiply the man-hours by the agreed-upon rate for each trade, and then add it to the materials costs (plus the markup, if contractually allowed). This is a very transparent billing format where the customer is aware of everything other than the hourly rate you’re paying your crew.  

Time and materials contracts are most suitable for projects where the scope isn’t crystal clear. If the customer is undecided on materials, direction, or the project is ripe for unforeseen costs, time and materials contracts help keep the contractor and customer on the same page. It also does away with pinpoint estimating, allowing contractors to get to work right away.

This billing format does hold a few disadvantages for the customer. Contractors have to be meticulous with record-keeping, from receipts to man-hours. One missed expense and the profit margin shrinks. Also, the costs to get the project off the ground are on the contractor’s shoulders, making timely accurate documentation and timely billing a sink-or-swim proposition.

How to calculate a time and materials billing

The first step for a contractor to be successful under a time and materials contract is meticulously detailed record keeping. This includes documenting labor, equipment rentals or purchases, and materials. 

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. 

Creating your bill is easy. While you’re in the time and materials billing module, simply select the costs and labor hours to add. You can set each cost to bill with the current invoice, save them for later, or mark them as never bill. 

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, if the contract allows, you can set the time and materials billing module to add set percentages for materials markups.

Once you review the invoice, Premier Construction Software will send the bill automatically 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 be included with a time and materials billing?

Top view of general contractor working on aia application for time and materials billing

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

Most time and material billings will include the following backup:

Invoice – The invoice should provide a summary of the amount. It should include the number of man-hours, and the labor rate, material expenses, and the overall markup.

Transaction list – Include a detailed report of the labor hours and costs for which you’re billing. The customer will want to review this list for accuracy and use it for their own reporting purposes.

Copies of invoices and receipts – Most customers will want copies of your accounts payable invoices that are being used to determine the invoice amount. They’ll also likely want to see any store receipts for smaller purchases. 

You can spend hours tracking these down and making copies, or you can use Premier Construction Software’s document management tool to automatically add copies of pertinent invoices to the email that goes to your customer.

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.

Lien releases or waivers – Some customers may require copies of lien releases or waivers from your vendors and subcontractors as proof that they have been paid.

Time and material billing doesn’t have to be a waste of time

Preparing a time and materials 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 time and materials billing module will streamline your time and materials 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 time and material billings, let us show you a simpler, easier way. Book a call with one of our representatives today to see it live.

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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

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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.