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Job Costing Resources

Importance of Job Cost Reporting

Valuable job cost reports provide crucial information about the current status of a job and can help estimate how you will finish on each job from a cost and revenue perspective. If you have many jobs in progress it can be difficult to manage, which is why it’s important to understand the reports so you can quickly identify exceptions and job overruns before it’s too late and address them accordingly.

In order to ensure you have real-time reports, you will require a truly integrated construction accounting and job costing software solution. It’s important to map out electronic workflow processes to ensure accounts payable invoices, purchase order and subcontract commitments are entered in as quickly as possible and distributed to the proper job allocation. If there are many jobs in progress, there is a strong chance that costs will be incorrectly assigned, but the function of the job costing system makes that highly auditable.

Job costing provides discrete “buckets” of information about each job so that the accountant can allocate costs directly to the job and division code, commonly referred to as the cost item. Advanced software solutions such as Premier provide cost item grouping and up to five levels of job cost breakdown for greater transparency.

If a job is expected to run for a long period of time, then the cost accountant can periodically compare the costs accumulated in the bucket for that job to its budget, and give management advanced warning if costs appear to be running ahead of projections. This gives management time to get costs under control over the remainder of the project, or possibly to approach the customer about a billing increase to cover some or all of the cost overruns. A considerable amount of costing precision is required especially when dealing with cost plus contracts where the customer pays all costs incurred. In most companies, controllers may cost code a job incorrectly which can misrepresent the job cost breakdown. For situations such as that, electronic approval systems are becoming a must have when evaluating job cost accounting software solutions.

Another advantage of utilizing proper job cost tracking is that you can better ascertain whether specific jobs are desirable to pursue in the future or what changes should be made next time bidding on similar work. It can be time consuming to enter in all the costs to the proper cost items but the introduction of mobile apps and proper job cost accounting software allows for real time costing and makes it easier to capture the information, thus leading to greater efficiency in the long run. The lack of detailed job cost reporting is why companies end up moving away from smaller accounting focused programs such as QuickBooks.  Here are a few sample reports that you should be able to run directly out of your accounting job costing system to determine variances, work in progress, and if you are over or under billing. Click HERE to see how Jonas Premier can help your business!

 

Job Cost Reporting #1

Job Cost Reporting #2

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Resources Trends & Technology

Secrets of Construction Software – Cloud vs Traditional ERP

Construction Software has become more powerful and there are many more options available in the market today. How do you decide what is best for you and how can you hedge your risk? Well, it’s not that easy! It’s important to educate yourself on which questions are crucial to ask so that you can easily differentiate the old from the new and identify software that adds real value to your organization.

 

The main challenge is finding an integrated accounting and job costing software that is robust, powerful, and easy to install and use.  With the introduction of cloud, software companies are challenged to move from traditional ERP to SaaS based models. To build software that is true cloud requires a significant investment. Most construction software companies do not have the development resources and required investment to compete in the cloud market so they take shortcuts such as using a third party hosting provider to host their software in the cloud. This is not a true cloud solution but rather dated technology camouflaged in a new technology framework.

 

Traditional ERP software contracts are structured in a way that locks customers in and increases the risk for businesses. It’s important to review the contract in detail so you don’t invest your hard earned dollars in software that is dated, comprehensive and can take several months to install. Also, traditional ERP software packages specialize in customizations and target multiple verticals. This results in numerous flags which lead to lengthy and time consuming installs.

 

Additionally, traditional ERP software solutions charge a high upfront license fee and lock you into a contract that is very difficult to terminate. In hindsight, they have very little incentive to provide a quality product and exceptional customer service. Under the new model – SaaS, there is no contract which significantly mitigates the risk for your business. It also holds the software vendors accountable to deliver what was promised during the sales demo – a quality product and exceptional customer support.

 

The differences between true cloud and traditional hosted ERP solutions quickly become apparent when you calculate the cost savings. Traditional ERP software vendors try to compete in the cloud market by hosting their software using a third party provider. There is an associated hosting fee and Citrix/VPN are required to run the software application. Not only is this costly but it is very time consuming, slow and usually there are connection issues and delays. Also, servers must be upgraded, maintained and require in house I.T support for back-ups, storage, corruption etc.

 

True cloud does not require a server or hosting fees and all back-ups and upgrades are included.

 

Most importantly, SaaS based companies have shifted their focus on customer satisfaction by taking the time to learn about construction businesses.  Establishing a meaningful partnership drastically positively impacts development and advances the software.  Most traditional ERP solutions set a lower budget for the number of training hours required for an implementation in order to make the quote appear more favorable. It is important to gain clarification around this to ensure an accurate number of hours is quoted. Most vendors charge for additional training whereas most SaaS based vendors are rolling out unlimited training models to ensure high adoption and satisfaction rates among customers. Typically users of SaaS based systems are using over 80% of the software’s capability whereas users of traditional models are left to train themselves and end up using less than 50%.

 

As you can see, the two solutions – true cloud versus traditional ERP – are drastically different. It’s important to take into consideration more than just the purchase price. If you make the wrong decision, it can disrupt your work environment, deter employees from change and end up costing you time and a significant lost investment. Choosing the right software is critical to a company’s success. If chosen correctly, it can increase productivity, centralize your team, provide meaningful reports and help you grow your business with less resources.

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Industry Insight Resources

Preparing for a Successful Software Implementation Process

When it comes to the construction industry, having a project plan in place to ensure each project runs smoothly is crucial to the success of that project. Well the same goes with Software. When implementing an integrated software package, the most common complaint is, “we need more training”. While training is the most commonly thought software implementation issue, there are four main concerns that must be addressed to ensure a successful implementation process. The concerns are leadership, communication, project management, and change management.

 

Issues Surrounding Leadership

Leaders need to set realistic goals and expectations upfront, before the implementation process begins to take place. This is the best way to garner positive results, as all parties involved will have a clear understanding of what is required for a successful implementation. Also, planning for what resources will be needed during the implementation process is essential to the success of the plan. Your employees are busy with their daily tasks as it is, therefore if the process is too difficult or unclear, the implementation is more likely to suffer than anything else.

 

Communication

Ensuring everyone is aware and understands the full scope of the implementation plan eliminates the element of surprise and allows employees to prepare for what lies ahead. By systematically communicating and releasing information about the software implementation process, your employees will be more aware and have a clearer understanding of the implementation progress. In addition, it is important to communicate why the change is being made and how it will positively affect the employees.

 

Project Management

The project manager keeps track of all aspects of the job and is relied upon to make sure that job goes according to plan. The same ideology should be applied to implementing a new software. While there is a team handling the implementation process, there should be an implementation ‘project manager’ to keep the process on track. This individual can ensure that the right employees are handling the appropriate tasks and that each person is understanding how the new software works.

 

Change Management

With any growing business, change becomes inevitable. With change however, it sometimes creates aversion amongst those who are resistant to moving away from their old ways. For example, some employees may be more comfortable using spreadsheets that they already know well, as opposed to learning a new software. Change is not an easy process it needs to be understood and managed in a way that people can cope effectively with it. Consult your employees about the implementation, have each one lead a certain part of the training process and report back to the project manager. Knowing the strengths and limitations of your business and your people is vital to a successful implementation process.

 

It is easy to point to training as the main reason why implementation projects struggle, but if all of the underlying concerns mentioned above are taken into consideration, the process will be a successful one.

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Industry Insight Resources

What to Consider When Looking For Construction Accounting Software

With all of the advancements in software functionality over the years, making a decision on the right construction accounting software that meets your needs can be difficult to say the least. Finding a solution that can seamlessly handle job costing, project management, progress billing, document management, and accounting is not an easy feat. The good news is that an integrated system such as this already exists. With that being said, there are key factors to consider when deciding on which construction accounting solution is right for your business.

Automation

The level at which your accounting system automates processes can reduce the amount of manual entries and double data entry. With less manual entries being made, there will be less chance of errors such as duplicate or incorrect data entry. Automation can also lead to greater employee satisfaction, as the amount of monotonous work will be reduced and more time will be available to complete more value added tasks and close your books faster.

Integration

Without a fully integrated construction accounting solution, consolidating information is difficult to say the least (as most of you reading this are well aware). From the office to the field, an integrated accounting system automatically consolidates information between these functional areas, thus reducing the time and effort it would take to consolidate manually. For example, field workers enter their hours directly from the field using the Jonas Premier Field APP, which then automatically integrates with payroll and all that is left is to approve the information submitted! No more entering hours from a manual worksheet and struggling to get your field workers paid on time.

Flexibility

Each business is different and having the ability to make changes on the fly is essential to staying ahead of the curve in the construction industry today. With a flexible construction accounting system, you can customize and adjust the functionality to adapt with the changing needs of your business. An example of this can be seen with editing prior periods. Jonas allows you to enter information into prior periods, providing you with the flexibility to go back into an accounting period and make changes or updates as necessary.

Reporting

Being able to audit and drill down to the electronic documents allows for reconciliation with ease and improved reporting capabilities. A great example of this is ad-hoc reporting. With Jonas Premier, ad-hoc operational and financial reports can be generated quickly and easily. This tool provides a fast way to generate and review multiple reports whenever you want them and automates the distribution as well.

Customer Satisfaction

With all of the day-to-day tasks we perform, we can sometimes forget about the customers we are dealing with. Having a construction accounting system that creates simple and configurable reports, contracts, and invoices will improve customer satisfaction. Having professional and easily understandable documents sent to your customers will help to reduce any further questions they may have and keep operations running smoothly.

 

Click the link to learn more about Premier Construction Software today!

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Resources

How to Have a Great Training Experience

For far too many clients, the scariest part about implementing new software is the initial transition from their old software. Migrating all their key data properly and ensuring their employees are trained effectively on the new system is a crucial and important step to their long-term success. If the training process is not carried out adequately their staff may lack the knowledge and confidence they require to become proficient users.  The above indicates just how critical proper training is for a smooth software transition and reduced headaches – but how do you go about accomplishing that? Simple! Just follow these four steps:

Establish Goals

Establishing goals on both ends goes a long way to ensuring a smooth learning curve throughout the training process. Set clear expectations and then strive to meet them; exceed if possible.

Make a Schedule

Setting out a realistic schedule will get the client to gradually use the software and be eager to learn.

Understand different learning styles

Get to know your client’s learning style and cater to them. People learn differently – some better with shorter training sessions, while others are more comfortable with a hands-on approach. Offer different options so that you can transfer your knowledge in a way that is most effective for your client.

Unlimited Training

Premier believes that offering unlimited training goes a long way in ensuring your client’s success. People learn at different paces, as companies grow employees are hired, or people simply forget how to use certain functions. Offering unlimited training gives clients the confidence that they will never be stranded.

 

Premier is dedicated to help you manage and grow your business. We offer advice on best practices, use a challenger approach and help you get the most out of our software. We understand the importance of the training phase and put an emphasis on always being available, creating efficient training schedules that are flexible, and sharing with our clients all the knowledge we have acquired over the years.

Please refer to our implementation process page for additional information.