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Industry Insight Resources Tips & Advice

Automate & Standardize Construction Compliances

Contractors know the value of staying in compliance with their contracts and their customers – it can make or break the relationship. Keeping up with compliance requirements and ensuring that customers have all the information they need can leave those contractors without an organized process scrambling.

Developing a process, standardizing it, and using automation to carry out routine tasks improves efficiency and saves money. But you may wonder, how do you do this?

So, what is contract compliance?

Let’s start by getting clear on what contract compliance means in the construction industry. Contracts require certain documents and information from contractors so that project owners know that they are operating within the terms of the agreement.

There’s an almost endless list of items that could be requested in a project contract, and each contract is different. Contractors have to provide the requested information and documentation to ensure the owner that they are meeting the requirements, not only at the beginning of the project but throughout its life.

Here’s just a shortlist of information that may need to be communicated to a project owner to ensure compliance:

  • Licensing
  • Insurance
  • Bonding
  • Credit information
  • Background check
  • Union agreement
  • Lien requirements and notices
  • Safety and health information

Ensuring that these documents are received by the owner, meet the contract requirements, and remain up to date with all your clients can be difficult if you aren’t tracking them in an organized fashion.

Here are some suggestions to get started on standardizng and automating your contract compliance process.

1. Create a process

The first step to automating and standardizing your contract compliance process is to create one if you don’t have one already. If you already have a process, document it so everyone knows what it is.

The steps in a contract process may include:

  1. Contract intake and review
  2. List items that need to be sent for compliance
  3. Review list for any items you don’t already have
  4. Obtain/collect compliance documents
  5. Sign contract
  6. Return contract to client
  7. Review requirements regularly for ongoing compliance

Depending on the specific compliance requirements, more steps may be needed. Make the process as simple as possible but recognize that it needs to be flexible as well.

2. Define roles

Now that you have the process written down, you’ll need to define who is responsible for taking care of each part. Steps can be assigned to departments or specific employees, depending on the size of your company.

For each step in the process, define what needs to be done, who is going to do it, and when it will be completed. It’s important to set deadlines for the completion of tasks, as contracts are often time-driven, and you need to ensure that you’ll meet the deadlines listed.

Be sure to include a way to deal with new documents or new requirements that you haven’t come across before. As situations and conditions change, contract requirements will as well. Assign someone to research the new requirements, as well as assign the task to the appropriate department or employee.

Once the process has been written up and all the steps assigned, distribute the information to everyone involved in contract management. Everyone needs to know who will be performing each role and how long they have to perform it, so they can keep each other accountable.

3. Automate as much as possible

Once you’ve created a standardized process for contract compliance, automation is the next logical step. Instead of wasting time finding and collecting paper documents, use technology to expedite the process. Automation helps streamline processes, which will save your team time and improve efficiency. And the chance for human error is reduced when compliance tasks are automated.

Construction management software can help automate your compliance processes. Online document storage and notifications can help ensure that you stay in compliance with your customers.

4. Periodically review and audit the system

On a periodic basis, you should review the system and audit the results to ensure that you are maintaining compliance with your customers. Talk to the employees involved in the process and look for gaps or areas that continually get bogged down. You’ll also want to review the current status of compliance over all your contracts to ensure that the system is working effectively.

Once you’ve completed the review and audit, assess the overall system to see if it is working and if it’s effective. If there are changes that need to be made, implement them, and then review the process again after a while. Continual improvement will help ensure that the process remains effective.

5. Remain flexible

COVID has taught us that we have to remain flexible and ready to pivot at any time. Contract requirements can be changed in an instant, and new requirements are added all the time. Meet with your compliance team regularly to ensure that the current processes are meeting the needs of the contracts and make changes, as necessary.

Start the process today!

The first step to standardizing and automating your contract compliance process is to write it down. Then assess it to see if it’s effective. Assign roles and responsibilities so each step is covered. Then, find out how technology can improve your efficiency by automating as much of the process as possible. Software, like Premier Construction Software, can track expiration dates and prompt you to request new documents as needed, and provide online file storage so your whole team has access to compliance documents from anywhere. Reviewing and improving your compliance processes ensures that your company is always running at the peak of efficiency.

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

7 Reasons to Invest in Construction Software

Technology has made sharing construction project information easier, but there are many companies that still struggle with getting information to project team members. Email has facilitated much of this communication, but it has its drawbacks. There’s no way to know if documents are the latest version and its easy for messages to get lost in overflowing inboxes.

Construction software offers an integrated solution that provides centralized data storage and management, real-time information, and easy access. Teams that take advantage of these benefits save time and money with improved efficiency, making the investment an easy decision.

Here are seven benefits that teams should consider when deciding to invest in construction software:

1. Share data

In 2020 accessing and storing data where everyone can get to it became even more important. Many companies had to quickly transition to allowing workers to work remotely or from home. Now many are looking at going to remote work permanently, meaning that access to data will continue to be a challenge that needs to be answered.

Cloud-based software systems provide a secure way for teams to share information from wherever they work. The ability to get to project information from a desk, tablet, or phone means teams can be more responsive and can ensure that they’re always working with the latest project information.

Over time many companies have developed information silos, where information flows freely within a department but doesn’t get transmitted to other areas of the company that need the same information. This is often the result when everyone uses different software. Purchasing integrated software that connects project teams and accounting means that project teams can get the cost information they need when they need it without waiting for another department to generate a report.

2. Streamline processes

As companies grow, responsibilities and processes are often developed organically. Employees do the best they can to share information, but without a view of the big picture, they often create processes without knowing why they’re doing it. While these processes may serve to get the work done, it doesn’t mean they’re the best way to do something.

Construction software can provide the structure needed to streamline processes that have grown cumbersome as the company has grown. Roles and responsibilities should be analyzed and reorganized based on the most efficient way to perform a process.

Construction management software also simplifies record-keeping and data retrieval processes. All project records can be stored in the cloud, so there’s only one place to save files and one place to look for information. Teams don’t have to search in multiple folders and software applications to find the information they need. It’s at the tip of their fingers.

3. Improve accuracy

When every department has their own software that they use for their work, sharing data is often performed by manually entering it into another system or by using spreadsheets. The Construction Technology Report for 2020 says that 49% of survey respondents transfer data by hand when integrations aren’t available. When data is entered by hand there’s an increased chance for errors or inaccuracies. Over time this can lead to significant problems in project reporting and projections.

Ensuring that all team members are working off of the most recent version of a document can be difficult when documents are shared by email or file links. Software can provide a document repository with accurate version controls, ensuring that the latest version is always available to everyone without searching.

4. Security

When files are stored on a local computer or server, or even in the cloud, security can be a concern. Access to the files may not be password-protected and the data is probably not encrypted. This means teams are vulnerable to lost data and technical issues that could prevent them from getting the information they need.

Dedicated construction software can ensure that employees have access to the data they need for their job, can’t see the data they don’t need, and ensures the security and protection of your information. Cloud-based software is housed on multiple servers and backed up to multiple locations to prevent data loss. User-level security measures also ensure that employees can only see the data they need to see.

Storing data locally also leaves companies vulnerable to cyber-attacks. Viruses can hijack computers and data, blocking workers from getting the information they need. Cybercriminals can hold you hostage until you pay their ransom, and there’s no guarantee you’ll get your information back. In the Construction Technology Report, 13% of respondents said their company had been the subject of a cyber-attack. Using a software packaged that is cloud-based and provides security will keep your data safe and protected from cybercriminals.

5. Improve efficiency

As work processes are reviewed and reorganized to better serve the company and its employees, workers are able to handle more work in less time. Software workflows increase efficiency as duplicate entries and rework are eliminated.

Additionally, when all the project information is stored in one system, employees only have one place to look for information. This saves lost time and money spent searching through emails, files, folders, and accounting records.

6. Business growth

With improved efficiencies project teams spend less time on current projects, leaving them with more time to sell new work. Companies find they are able to take on more work at the same staff level because everyone is working more efficiently and processes have been improved. Also, costs for correcting mistakes, duplicating entries, and rework are reduced.

7. Safety and health tracking

With increased need for safety and health tracking during the pandemic, project teams have been looking for ways to collect wellness screenings and other data. They’ve also been searching for ways to provide safety training and documentation without personal contact. Software can provide a safe way to gather and securely store the required information. Additional data tracking helps teams keep their records organized.

See the benefits today

Many companies hesitate to invest in software because of the steep learning curve and time needed to train employees and roll out the product. When viewed throughout the lifecycle of the software, however, these initial pains are quickly made up for in improved efficiency, more accurate data, and the ability to act on up-to-date information. Teams soon wonder how they did their work without the powerful assistance of software.

If you’re looking for a complete, all-in-one software package to run your projects and accounting, Premier Construction Software is the tool you’re looking for. Contact us for a demonstration today.

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Industry Insight

Using Construction Software to Keep Your Office and Field in Sync

In earlier blogs (linked below), we discussed various ways the COVID-19 pandemic completely disrupted the construction industry last year. And although we’ve finally put 2020 behind us, we’re still figuring out how to navigate “the new normal” and what that will entail for the future of construction. 

The Impact of COVID-19 on Construction Costs 

COVID Changes in Construction

How COVID-19 Has Shifted the Construction Industry in 2020

Despite lingering uncertainty and a lot of unknowns, it’s still necessary to develop a resource strategy for this year in an attempt to make more informed decisions and more accurate forecasting. To do so, you’ll want to start by reviewing and assessing last year’s performance metrics to develop a strong foundation for managing future resources more effectively. 

It’s important to note, however, that the ability to improve your business strategies is heavily contingent upon the reliability of your dataand herein lies one of the major benefits of utilizing Premier Construction Software. Premier’s all-in-one construction software solution features job costing, accounting, project and document management tools to ensure the data syncs real-time, making it easy for businesses to trust the data when making important business decisions.

Read on to learn about five of our core features, how they help keep your office and field in sync, and why that matters:

Job Costing

Job costing relies on accurate, up-to-date data—and that’s where we excel. Our software boosts efficiency by providing real-time, automated job costing data with complete transparency across all your projects. The comprehensive job dashboard is your hub for to-the-second job costing, and helps streamline the entire process by providing all the data you need in one place. 

Using the job dashboard, project managers can track and compare the original contract to the current costs and the estimate at completion, enabling them to make smarter decisions. Using the forecasting module, they’ll be able to account for unanticipated costs and electronically request internal budget transfers to keep the project on track. It also features sections for key performance indicators, at-risk or outdated items, approvals, and pending items.

Time Entry

Our time entry feature makes connecting your field crew to the home office easier than ever. Using our mobile app, employees can log their time in and out from the convenience of their phones. The app automatically tracks dates and times, as well as job numbers, cost items, cost types, and even occupation codes. When your employees enter their time from the field, that data routes directly to your foreman. This workflow creates a seamless, transparent time tracking process for the foreman, enabling them to stay on top of their crew. 

entering time for field construction workers in Premier Construction Software

Change Orders

We understand changes happen—and in construction, they can happen a lot. With our software, your team can send, track, and approve change orders from one convenient place. Upon approval, the software automatically uploads the signed change order to the system with the updated status. It also saves you time by auto-generating progress billing lines, as well as creating and emailing subcontract change orders and purchase orders. Your reports benefit as well, as approved change orders update them automatically.

Document Management

Sometimes the quickest way to get everyone on the same page is to share a document. With Premier’s document management system, you can create customized document folders, making important documents easy to find and share. Every folder has customizable security settings, enabling you to grant safe, secure access to those who need it. And because we offer limitless storage, project managers can quickly and easily refer back to former document versions and track the entire history of a document. 

Compliance Tracking

Premier makes it easy to manage compliance documents across all of your construction projects from one dashboard. You choose which documents to require, update statuses instantly as they come in, and upload them to the document management system for safekeeping. You’ll receive notifications for missing, expired, or soon-to-expire documents and drill down to get to the bottom of it. You can also program the system to automatically place the invoice on hold or initiate a hard stop until there’s a resolution.

Getting Everyone on the Same Page 

While we can’t predict what the rest of the year will hold for the construction industry as a whole, you can utilize construction management software to make more accurate project planning and estimating predictions.   

To learn more about how Premier Construction Software can help get your office and field in sync, click here to schedule a personalized product tour.

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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.