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Industry Insight Tips & Advice Trends & Technology Ultimate Guide

Why is Software Support Critical to the Success of Your Business?

We know that changing financial and project management software can be stressful. The transition is often bumpy and can take several weeks or months to implement. With Premier Software you get the help and support you need throughout the software implementation and use process.

We help ensure that you are getting the most out of your investment and that your team is working at its peak efficiency. Here’s how Premier Construction Software provides you with the support you need to improve your business success.

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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. 

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Tips & Advice Trends & Technology Ultimate Guide

Electronic Approvals: The Key To Improved Synergy

When a construction company finds a way to improve communication and efficiency, it’s taking a step toward serious growth. With everyone in the company having access to the tools to work quickly and automate their most menial tasks, they can expand their possibilities and find job satisfaction. In construction, the synergy electronic approvals promote can be the key to unlocking both these scenarios.

Electronic approvals in construction are all about automating workflow, improving communication, and maximizing efficiency. Everyone benefits from these tools. Let’s find out how.

Electronic Approvals: An Overview

In construction, almost every decision, change, or adjustment requires someone to approve it. In the past, getting approval meant faxing or physically bringing a document to the owner, project manager, designer, or another party for a signature. If there were issues with the proposal or document, the courier would head back to the drawing board, draw up a new document, and track down the signature again. 

Obviously, this is slow, tedious, and inefficient. In a business with thin margins and tight deadlines, moving to an automated method of gathering signatures makes much more sense. Thankfully, we now have the electronic approval.

How Electronic Approvals Work

Electronic approvals serve the same purpose as traditional approvals, yet they benefit from supercharged efficiency. These approvals automatically head directly to the person who needs to review them. They’re often built into documents, allowing the user to open them on a computer or mobile device, sign them, and send them back in real-time. 

To make this process even faster and smoother, system administrators can set up automatic workflows that trigger alerts anytime someone does something that requires approval. And, to drill down even deeper, these administrators can often program which types of decisions need approval. They can opt for or against approvals for budget transfers, change orders, payment applications, compliance acceptances, and a number of other documents and processes. 

The Benefits of Using Electronic Approvals

There are lots of benefits of using electronic approvals. The obvious advantage is speed, but convenience and accuracy should both rank high on the list.

Electronic approvals are fast. Generating themselves automatically, they’re on the way to gathering a signature the moment that an event triggers them. This allows the company to work faster and more efficiently without adding additional staff.

Not only are electronic approvals great for intercompany transactions, they’re also a bonus for customers. Rather than taking time out of their day to head to a fax machine or print, sign, scan, and send a document via email, they can handle the approval from their mobile device. This convenience makes customers more responsive and improves communication.

Accuracy is also a major factor. Whenever there is a human inputting data or drawing up documents, there is potential for a small mistake or oversight. They might even misplace the document or forget to send it (or that they sent it in the first place). With electronic approvals, as long as the contact information is correct, the other party is sure to receive it. And, if they don’t sign it right away, the system can keep track and send reminders and alerts.

Electronic Approvals: Improving Synergy in Every Role

Speed, convenience, communication, and accuracy build synergy, and electronic approvals are no exception. These tools improve the lives of everyone involved in the project, from folks working in the office to the people on-site—even the project owner. Everyone feels the benefits of synergy.

Project Management

Electronic approvals make a massive impact on the way that project management teams perform. As they always seem to be putting out fires, having access to instant approvals on the fly is imperative.

Consider a cost overrun due to a materials shortage. First, the project management team might need to shift the budget from one line item to another, so they’ll need approval from the accounting department. Or, the architect might need to choose a different material, and they’ll need to send a change order to the project owner.

Regardless of the reason, the project management team can send and receive electronic approvals in seconds, allowing the project to move forward and avoid significant delay.

Finance and Accounting

Financing and accounting departments have some critical roles to play, keeping an eye on profitability and ensuring the company has the resources it needs to succeed. And, the type of clarity electronic approvals offers these departments allows them to see the whole picture.

As projects progress, delays, shortages, and changes can take the established budget and turn it on end. With electronic approvals generating automatically, the accounting department will always know where the money is going, who’s moving it, and what for. This improves communication, creates accountability, reduces errors and redundancy, and ultimately protects the company’s profits. 

Field Personnel and Subcontractors

The boots on the ground physically constructing the building benefit from electronic approvals, as well. While these folks might be top-notch problem solvers, they often need the approval of the project management team or designer to move forward.

Let’s envision that there is an issue with the on-site conditions, and the field personnel won’t be able to construct a wall according to the plan. The field personnel can submit an RFI to the architect. This RFI will state the issue and propose a solution, and with electronic approval, give the architect the ability to approve or disapprove in real-time. 

And, one of the most important electronic approvals involves on-site personnel. Modern construction companies often allow subs to submit their pay apps online, saving time and frustration. A few folks within the different departments have to put their eyes on these applications, and each can approve or deny the app with electronic approval. This reduces the amount of time it takes the sub to get paid, making them happier and more willing to work with the construction company again—once again, improving overall synergy.

Project Owners

Some of the most frustrating things for project owners who don’t typically work in the construction space are the constant changes and paperwork. While they might have the architect or designer handling most of the issues, they still need to be available to make some decisions. Often, this means taking time out of their day to meet with contractors to review paperwork.

With electronic approvals, project owners don’t have to feel so overwhelmed. All of the documents they need are at their fingertips. They can quickly provide electronic approval through their mobile device. This can help relieve some of the tension, stress, and confusion that many project owners suffer during the construction process. And, since electronic approvals improve communication, project owners will always feel like they’re in the know.

Automated Workflows and Improved Synergy? Yes, Please

Ultimately, electronic approvals are excellent tools for building a better running, more efficient, more cohesive construction company. They keep everyone in the loop, allow for instant responses and improved communication, and minimize the chances of mistakes or errors. Who wouldn’t want those for the company, employees, projects, and clients?

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. 

Categories
Tips & Advice Trends & Technology

Inefficiency Costs in Construction

It doesn’t matter which industry you work in, inefficiency is a profit killer. Doing things twice, taking too long to accomplish a goal, or paying too much to get something done are all sure ways to beat up a company’s wallet. For that reason, most companies aim to streamline their processes and improve efficiency. Unfortunately, that’s a tall order for the inefficiency costs in construction. 

What causes inefficiencies in construction?

Inefficiencies typically start with a lack of information, but they can take many forms. The following are some of the largest contributors to inefficiency costs in construction.

Poor Planning

There are many moving parts on a construction project: project owners, general contractors, subs, suppliers, designers, engineers, inspectors, financing lenders, and more. Getting all of those parties to play nicely and on time with each other is truly an art, especially when it comes to scheduling. 

One scheduling snafu can cause massive issues, especially if it involves a materials delivery or a specialty sub that can’t make it back to the site in the near future.

Poor Communication

One of the most significant issues causing inefficiencies in construction is poor communication. Job site confusion, questions about certain aspects of the project, unclear scopes of work, and even changes in designs aren’t always handled quickly and efficiently. Instead, questions compile and delays build, costing the contractor, subs, and project owners precious time and money.

Let’s look at a likely situation: A specified type of flooring isn’t available, and the flooring sub needs to know what to do. Instead of taking the efficient route and sending an RFI to the designer, he tells the GC he needs an answer before ordering. The GC is juggling 15 things at one time and gets distracted by something on the job. He never delivers the message. 

By the time the subcontractor needs to be on-site and laying floors, he’s already behind schedule because he was waiting on an answer and couldn’t order the floor. 

Lack of Skilled Labor and Training 

The construction industry’s need for skilled labor is well documented, but understanding how much this lack costs the industry isn’t so cut and dry. Without a crew of men and women that a company can rely on, projects take longer than necessary. Also, these crews’ inexperience means they might not recognize when they’re working inefficiently.

A lack of training can contribute to the issue. Whether it’s a new system or technique, or even just basic safety, not training staff in how to do a particular aspect of the job will cost a business. In the best case, they learn by trial and error. In the worst cases, injuries can occur. In either case, things are running inefficiently.

And, consider the amount of time and resources it takes to recruit the folks to help run the business as smoothly as possible. What could the company do with those resources, otherwise?

Aversion to Technology

One aspect that separates the construction industry from just about every other business is its unwillingness to adopt new technology. While most industries have moved toward automation and streamlined processes thanks to the latest technology, construction holds fast to its old ways. 

Take drawing management, for example. If a company is still using paper plans, they need to be sure they’re using the latest, most updated set of drawings. Someone needs to print the plans and get them to the job site, costing money in supplies (paper and ink) as well as travel time and vehicle cost (gas, wear and tear).

Instead, a drawing management system allows GCs and project managers to check for the latest plans via a mobile device from the job site. And, anyone else who needs to see those plans will also have instant access, allowing them to make decisions or change course whenever necessary. 

What Inefficiencies Can Cost a Construction Company

When you consider the wide range of inefficiencies that exist and what can cause them, it doesn’t take much to imagine they make a huge impact on the bottom line. 

While some situations are unavoidable, issues caused by poor communication are estimated to cost construction workers almost two full days of work each week. Multiply those two hours by everyone on the project, and it becomes painfully obvious that time is money. 

And, if you consider how much time call-backs cost, as well as time spent on fixing avoidable errors caused by miscommunication, the numbers get worse. It’s estimated that all of these inefficiencies are costing the construction industry around $177 billion each year. 

There is a Solution

Most of the issues that cause inefficiencies are the result of poor communication or missing information. The good news is there is a simple way to improve communication and collect data in one spot—utilizing and ERP-based construction management software.

Automation

ERP software can streamline a business’s day-to-day tasks. By automating some of the more mundane and error-prone manual tasks, the team can focus their attention on creative solutions to unique problems. Whether it be tracking revisions, ensuring everyone’s compliances are up to date or giving everyone on the job an easier way to pay or get paid, automation can be the answer.

Better Decisions

It’s tough to make a good decision without all the information available, and construction management software can help. By centralizing all the data collection with an ERP, decision-makers will have the latest data and information available. This allows them to make smarter, more informed decisions to limit inefficiencies and keep the company and project on track. 

Drawing Management

Drawing management is also critical to ensure everyone is literally on the same page. Revisions and changes are instantly available to everyone on the job. If there are any questions or an RFI is necessary, creating and managing those documents using the ERP software is easy. Automated workflows ensure everyone who needs to receive these documents does, improving communication.

Cloud-based Access

Finally, construction management software can ensure that all of the important data, reports, drawings, invoices, and other documents are available at the users’ fingertips. Cloud-based software allows access from anywhere and on any device with access to the internet. Coupled with real-time updates, cloud storage ensures everyone is working with the same data at all times. 

Better Reporting

Last but not least, ERP-based construction management software helps businesses look at their past practices and forecast their futures. With automatically updated reports like job costing and budgets, and key performance indicators, the company will have an easier time hunting down inefficiencies and improving its practices.

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:

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