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Accounting Accounting Software Construction ERP Software Features

Simplified WIP Accounting

The WIP report is one of the most valuable reports that a construction company has. Also known as a Work In Progress report, this tool allows management to identify potential cash flow issues, project progress, and the overall trajectory of their projects. But these reports are tough to maintain and require constant updates. And here’s a hint: that spreadsheet won’t cut it.

This guide will explain what WIP reporting is and the benefits that construction management software can offer.

What is a WIP Report?

A WIP report, or Work in Progress report, is a document used to detail a company’s current profitability on a project quickly. It tracks the amount of money expended on the project, the amount billed, and the amount still required and compares it against the contract total.

Most companies use spreadsheets to complete their WIP reports, which means there isn’t a standard template. However, most WIP reports contain the following information:

  • Project name and identifying information
  • Total contract value sold on the project
  • Estimated cost at completion
  • Estimated profit
  • Pending Change Orders
  • Amount Billed
  • Job progress percentage
  • Over/Under budget amounts

These reports can contain data from all of the company’s projects, different aspects of one large project, or simply just one project.

WIP reports are essential (and even required by the IRS) on large, long-term projects. They’re also incredibly valuable during progress billing contracts. They help the contractor identify if there are cash flow issues before they become too large to overcome. But, that’s only if the reports are maintained correctly—and that’s pretty hard to do with a standard spreadsheet.

The Benefits of Using Premier Construction Software for WIP Accounting

WIP reports aren’t explicitly construction-specific reports. Many industries use these reports to track the process of bringing a product through the manufacturing process. For this reason, there are lots of different WIP report types and templates. But, using software designed specifically for construction can help simplify the process. The following are some of the most significant benefits of using construction software for WIP accounting.

Customized WIP Reports

Most construction companies would prefer to see the same data on their WIP reports: total amount, amount billed, amount expended, and current over or underbilling. However, there may be specific values they don’t need to see or other matters they’d like to track. Premier allows users to customize the values they see or track on their reports.

Beyond the individual values, our software will also allow users to quickly generate WIP reports for all, several, or just one of their projects. They can get a quick overview of their company’s cash flow with a general report or drill down into each project to identify the cash flow challenges they may be facing. They’ll then be able to address the issues with those projects in less time than it would take for them to assemble a complete report.

Real-Time Reporting

One of the challenges of maintaining WIP reports with standard spreadsheets is keeping them updated. Each invoice or change order that comes in will effectively change the WIP report, and without someone constantly updating the report, it won’t reflect the true status of cash flow and progress on the project.

But with Premier Construction Management Software, keeping up with the latest data isn’t a problem. Our software allows for electronic payments and approvals, meaning any payments going in or out as well as any potential profit changes are automatically tracked in the system. Any values those payments impact will automatically update across multiple reports, including the WIP, ensuring the data is always up to date in real-time.

Improved Communication

WIP reports bring two parties together: project management and the accounting staff. Both parties need to watch these reports carefully to ensure that the project is on track and remains profitable. Unless that document is easily available to both parties at the same time, communication becomes a challenge.

A software like Premier, which is designed for construction can simplify the communication process. Our reports are cloud-based and easily accessible by project management and accounting staff. Both parties can be looking at the same WIP report at the same time, and since the system updates the report automatically, they’re sure that the data is up to date. Any questions or concerns they have can be expressed and discussed in real time because the software ensures everyone is on the same page.

Accurate Data

Manually updating spreadsheets and subsequent reports is a recipe for disaster. Every data point entered by a person is an opportunity for human error, meaning values might not jive and the reports generated might not be accurate. For this reason, contractors can never be entirely sure that the WIP report they’re looking at is full-proof and accurate, and just one decision based on bad data can be disastrous.

Using our software won’t remove every chance for error (a human has to input the original data, after all), but it can help reduce mistakes drastically. Since our software will automatically update values affected by the latest data, there won’t be any forgotten changes, misplaced decimal points, or mathematical errors. This helps contractors make the best decisions possible by knowing the data is accurate.

Correct Cash Flow Issues Before They Become Severe

Construction is a cash-hungry business, and tracking cash flow is essential to staying on top. That is the point of a WIP report in the first place. However, when it’s a spreadsheet that is updated infrequently, cash flow issues can become severe before anyone notices them.

With an automatically updating, accurate WIP report generated by software like Premier, users can identify cash flow issues when they’re small enough to correct. As project progress continues and management recognizes they’ve underbilled, they can send an invoice to get things back on track. And, since many of these programs can be customized to send budget warnings, project management might be able to get ahead of a budgetary issue before even checking the WIP report.

Impress Stakeholders

WIP reports are some of the only reports the average investor even cares about. These reports tell them where the project is headed, how much money it will make, and where it stands from a cash flow standpoint. They want these reports to be simultaneously comprehensive and simple to understand.

Premier can do just that. With the ability to instantly generate a report, project managers can show investors exactly what they want to see and when they want to see it. And, since the data is accurate, those stakeholders will be able to make better decisions in less time, making them happier with the project and contractor involved.

Let Premier Construction Software Simplify Your WIP Reports

With reports this important, does it make sense to take a chance with a spreadsheet? Improve cash flow & communication while reducing errors with Premier Construction Management Software. Let us simplify the WIP process while offering real-time data that you and your investors can rely on.

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Accounting Accounting Software Construction Job Costing Trends & Technology

Time is Money: How Premier Construction Software Can Save You Both

While a project can take months or years to complete, the reality is that construction moves fast. A company that knows time is money and knows how to make the most of both is on the path to success.  Premier Construction Software can help with time and money, and in this guide, we’ll discuss how it can save your company both. 

How Premier Can Save Time and Money

Would you put trust in a software program that can save your business both time and money? It seems like a no-brainer. That’s what our construction ERP solution was designed to do, and the following features or abilities are just some of the ways that Premier can impact your company.

Automated Processes

All of the data entry, report creation, and updating required to keep a construction business on track requires a lot of time. One of the most significant benefits of using Premier Construction Software is its ability to automate processes. 

When a user inputs or changes a value in the system, the software knows to update every related value affected by the change without a person having to track down the specific pay app, change order, or report.

One-click updates might seem the big time and money saver here, but consider this: Updating reports and budgets manually introduces multiple opportunities for human error. The time it takes to realize there is a mistake, track it down, and change it can be tremendous. And, should that mistake affect the project, it may translate to real money wasted. 

Customizable Workflows

The amount of time it takes to get a document, budget transfer, or change order in front of all the people that need to see it is often time wasted. With customizable workflows, users can design a free-flowing system that automatically moves important documents from person to person.

Ultimately, these custom-designed workflows ensure that important documents or changes make it through all of the required stops faster. Whether these documents need approvals, modifications, or updates, the company will receive feedback in less time using automated workflows.

Cloud-Based Storage

Upgrading document and drawing storage is a great way to save time and money. While most construction companies have evolved away from running to the shop every day for the latest revisions, their access to these documents is still antiquated and slow. 

For example, loading drawings onto a drive and then having to access those drawings with a computer is slow. Or, attempting to send large files through email only to have it take forever. And what if that drawing wasn’t the most updated version? Or just the older version the other party was looking for?

With cloud-based storage, contractors can move past those old, slow document management solutions. Premier Construction Software allows users to access the cloud for documents, drawings, photos, pay applications, and more from any internet-enabled device. It’s one of the fastest ways to share information with a team, and it can save time and money right away.

Report Generation

No one wants to blow that meeting in front of the investors or stakeholders, but time spent compiling data for a custom report may be a waste. Premier has the ability to automatically generate important reports with the very latest updates, as well. 

Not only are these reports easy to generate, but they take into account all of the most up-to-date information. Rather than stressing out about that report all week, it’s possible to simply click a button to create a report that’s not only instantaneous but also more accurate than anything you could compile.

Electronic Signatures

The construction world runs on agreements and signatures. Waiting to get those signatures on a paper agreement takes lifetimes (or at least it feels that way). The documents either need to be sent via courier or downloaded, printed, and sent back. Or, the agreement has to wait until a meeting can be scheduled for everyone to review the documents together before anyone can sign anything.

With electronic signatures, this entire process can take a fraction of the time. Documents can be sent electronically, which recipients can open from any internet-enabled device. Once they’ve reviewed the contract, change order, proposal, RFI, pay application, or any of the many compatible docs, they can sign electronically. This instantly updates the status in the system, cutting down on data entry or errors, and saving time and money.

Subcontractor Management

Minimizing the amount of time spent collecting lien waivers, monitoring compliance, calculating payment retainage, and ensuring everyone gets paid costs contractors and project managers lots of valuable time. But with a construction ERP like Premier, which is designed to make subcontractor management easier, users can save time and money.

For instance, Premier can track licensing and insurance compliance documents and alert the users and sub to possible expiration. It can also automatically generate subcontractor agreements and change orders instantly and ensure that those documents make it to the sub for an electronic signature. It’s also easy to set up automatic retainage for each payment, as well as distribute payments automatically (and accurately) by setting up pay-when-paid AP. 

Premier is All About Strengthening Your Business

Premier Construction Software’s goal is to strengthen your business using simplicity and automation. This means less time spent doing the remedial tasks that are always prone to error. When you’re not paying them to handle these tasks, you’re saving money and freeing them up to be creative and focus on projects that create more revenue for your business—and that’s a recipe for success. 

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Accounting Industry Insight

Understanding Change Orders in Construction

premiercs understanding change orders in construction

Every company sees change orders slightly differently. Some see them as a time and resource vacuum, while others see them as opportunities to make more money. And the fact that there are many different outlooks on the subject makes truly understanding change orders in construction and the impacts they have a challenge. In this guide, we’ll take a look at these important documents, what they are, and how to manage them.

What is a Change Order?

A change order is a document used to modify the original contract on a construction project. These documents detail changes in the scope of work for the contractor as well as any adjustments to the amount of money the contractor will make on a project. They’re essentially miniature contracts (sometimes with not-so-miniature impacts) that steer the project after the original contract is awarded.

For example, let’s say a contractor won a bid to build an apartment building with eight identical apartments inside. At some point during the project, the project owner realizes that the bathrooms could benefit from half-walls alongside the toilets. The project owner will approach the contractor, they’ll discuss the details, and the contractor (or project owner) will draw up a change order that states the contractor will build half-walls in the bathroom for an agreed-upon price. It’s simply a contract within a contract that denotes a change in plan, materials, or pricing. 

Change Orders for Additional Work

Change orders for additional work require more time and resources. For that reason, these change orders will increase the total cost of the project, as well as extend the timeline. Impacted contractors must ensure that the change order reflects these changes to avoid issues when dealing with these types of change orders.

Change Order for Subtractions

Change orders that omit certain aspects of the agreed-upon original contract have the opposite impact on the cost and timeline. Under these change orders, project owners and GCs may expect the price and timeline to decrease. 

What Causes Change Orders?

Change orders can be caused by project owners, designers, inspectors, contractors, material suppliers, and many other possibilities. 

  • Project owners can change their minds about the budget. 
  • Designers can add design elements or colour changes. Inspectors may notice code issues that require the designer to go back to the drawing board. 
  • Contractors might not be able to do the job for the agreed-upon due to unforeseen circumstances or site conditions. 
  • Suppliers might not be able to get the chosen material.

Any one of these situations would alter the original plan. They could impact the budget or the timeline, and these changes need to be documented and agreed upon with the parties responsible for the changes. How these changes impact the project depends on what they involve.

Change Order Protect Contract Parties

Change orders can be a headache to manage, but they protect contracted parties. These documents take modifications in the course of the project and turn them into clearly-understood directives with legal backing.  

Contractors know that once they have a change order, they can move forward with the project without fear that they’ll be breaching the contract. They also know that if the project owner or designer adds something, they can adjust the timeline or project price and that they’ll have lien rights if they don’t get paid. 

Project owners know that they can alter the contract to subtract an item or design element. This will likely lower the amount of money the contractor was expecting, but the document keeps the contractor from suing or placing a lien on the project for non-payment. 

How to Manage Change Orders

Managing change orders is the most difficult aspect of these documents. Knowing how they’ll impact the budget and timeline, getting the correct signatures, communicating changes to stakeholders, and changing everything in the system at one time are all difficult tasks to coordinate. 

Budget Impacts

Change orders can cause ripple effects on a project budget. For example, if a particular material isn’t available, but a more expensive item is, it’s important to know how much that will impact the project budget before moving forward.

With construction ERP software, many of the best programs offer customers a chance to see how the change would impact the budget in real time. These systems allow users to lock original estimates or shift budgets without permanent changes. This also makes communicating the change’s impact much easier. 

Timeline Overruns

Change orders are often to blame for the project running off track and behind schedule—whether it’s true or not. But, changes typically impact the timeline a little, as they usually mean more or less work. It’s knowing how much it will throw the timeline off track that makes a difference, and the change order should reflect it. 

A construction ERP can help determine how much of an impact the change order will have on scheduling and the project delivery date. This can help the project owner decide if changing the timeline is worth the cost.

Getting Approvals

Getting approvals and signatures is always a challenging aspect of construction, and change orders are no different. Ensuring that the right eyes are seeing the change order and then get their signature can seem impossible.

A construction ERP can simplify this issue. By setting up automated workflow and capturing electronic signatures, the change order process moves along faster, saving time and money. Users can access the system from any internet-enabled device in the world.

Automated Changes

Once all of the approvals and signatures are secured it’s time to make the actual changes. Entering the change orders into whatever accounting software program the company uses is all the opportunity that’s required for multiple data entry-related issues like human error, accuracy, and a lack of thoroughness.

The right construction ERP software can handle this challenge, making automatic changes to every line item affected by the change order. With the click of a button, the changes will ripple through the entire system, automatically updating budgets, billing amounts and timelines, and more. 

All without manual data entry.

Communicating Changes

Communicating changes to the contract to company stakeholders requires data and reports. They want to know what’s changing, how it’s affecting the project delivery, and how much it’s going to cost the company.

Construction ERP software can handle those questions and more. With the ability to generate reports in real-time, project managers can provide stakeholders with the latest, most accurate information regarding these changes. 

Change Orders are Necessary, But They Require Management

Change orders are necessary, as almost all projects go through one change or another after signing the contract. But knowing how to manage these documents is important. By relying on the right program, like Premier Construction Software, contractors can minimize the negative impacts these documents have on their projects. And isn’t that what it’s all about?

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Tips & Advice Company News Industry Insight Resources Ultimate Guide

The Importance of Employee Training for Construction Software

Software training is key during new software implementation. For workers, it helps them learn the software’s workflow, allows them to test drive the solution, ask specific questions and get more help when needed. For companies, it reduces the transition time, improves morale, and improves efficiency. For more on these benefits and some additional ones, see the list below.

Employee Benefits

1. Learn the software’s workflow

One of the reasons many companies upgrade their software is to gain efficiencies. If you use the same process or workflow in new software, you won’t gain anything. However, through training, you’ll learn how the new software handles data entry, processing, and reporting. Without training, you may spend more time trying to make it do something the way you want it to work, and this wastes time, and money, and reduces your ROI.

2. Concentrate on learning

If you’re trying to implement new software while keeping up with your other duties, it can get stressful fast. The strain of juggling your existing work can make it more difficult for you to learn how to use the new system. By setting aside training time, you can fully concentrate on learning new processes and workflows without the added stress of your other duties.

3. Test drive the software

Training gives you the time to work with real-world examples in the new system. During training, you’ll enter transactions, process data, and run reports, just as you would in your daily work. By “test driving” the software with real data you get a chance to not only see how the software works, but also learn by actively performing the work. Once you go live, you’ll have the data you worked with during training to remind you how each process is performed.

4. Ask specific questions

Every company has situations that are handled differently in that company, and training gives you a chance to ask questions about these situations and work out what needs to be done with an instructor. In addition, you’ll get a chance to learn from questions that others ask during the training, and you’ll receive direct feedback from the instructor.

5. Get added help when needed

Your training time is the time to ask for help. If you’re having difficulty performing a process or knowing what to do next, it’s time to ask for and get the added assistance you need so you can be fully confident using the software. Don’t be afraid to ask for help, whether it’s during a class or one-on-one. Our team is here to make sure you get the training and information you need to make the most of our solution.

Company Benefits

1. Reduce transition time

Anytime you change or update a software solution, there’s going to be a learning curve and it’s going to take time to get the new system up and running. However, when employees aren’t trained properly, this transition time can be extended as they use trial and error to figure things out. But with training and assistance from the software team, this time can be reduced, as well as the number of headaches.

2. Get the most from software efficiencies

You probably didn’t buy new software because it was going to take just as much time to do things as your current solution. You’re probably looking for some efficiencies or cost savings to justify your purchase. In order to take advantage of the efficiencies and improved reporting promised, you’ll need to learn how the developers intend the software to work. Training will walk you through each process and show you exactly how you can save time using the new system.

3. Save time on trial and error

Some teams will work diligently using trial and error to figure things out. This takes a lot of time, as data is entered, deleted, and reentered in a different way. Workers may be trying to use an old system with new software, and that just isn’t going to cut it. Why waste time with trial and error when training can give you the answers you need, allow you to practice using the new system, and get you up and running faster?

4. Improve morale

Software transitions are stressful. Team members can get frustrated with delays and time spent fixing errors and reentering data. When everyone gets trained on how to use the system properly, there’s reduced stress and employee turnover. Workers develop a sense of teamwork as they work together to implement the new system. They help each other solve problems and work through the process more quickly.

5. Track training progress

Employers can quantify and track the training progress of their employees, so they know at a glance who has practiced what skills. This can help with cross-training and job shadowing. If an employee is going to be changing positions, make sure they have time to review their training and refresh their knowledge about the new process.

Buying new software and not providing training is like throwing a person in the water and telling them to swim. They’ll figure it out, but it’s going to take a while and they won’t be very good at it. Software training provides an opportunity for workers to learn new skills, practice them, and see how the new system works. Employers benefit from reduced transition time, improved team morale, and the ability to quantify and track each worker’s skills.

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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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Ultimate Guide Features Industry Insight Tips & Advice

Is Construction Software Worth the Investment?

Construction software isn’t cheap, and when it comes to calculating the ROI, it can be difficult to see the upside. Even though it may not be obvious, there are some real, hard benefits to purchasing a construction-specific software solution.

The importance of investing in construction software

Many construction companies start out using general accounting software, like QuickBooks, to manage their finances. Usually, these solutions are effective for a while, but then the business gets busy, hires more workers, and soon outgrows the tool. During this phase, important job and budget cost tracking is often done using spreadsheets, which are prone to errors and don’t always have the most up-to-date information.

As a company continues to grow, they often look to invest in construction-specific software that will help them manage finances and projects within the same software. Investing in all-in-one construction software is important because it:

  • Provides one source for information, data, and project file storage, both in the field and in the office. This improves communication and increases collaboration.
  • Connects the field to the office, eliminating costly data silos, where information isn’t shared across teams.
  • Improves data accuracy by eliminating error-prone spreadsheets.
  • Improves accessibility by providing information for multiple hardware options, from laptops, smartphones, tablets, and desktops.
  • Allows teams to know what resources they have and when – which helps with forecasting.

Why you might not want to purchase software

There are many reasons contractors and suppliers don’t want to purchase new software. It can be difficult to make a change, especially when the current system is “working.” Many workers fear change, even if it will make their jobs easier or quicker. Fear of the unknown keeps many from making any kind of change, even a good one.

Changing software costs money. There’s no way around it, there’s a financial cost to any software system. While it’s important to know how much the software will cost, it’s also important to assess the potential benefits of a new system. These benefits aren’t always obvious and can be difficult to measure. They include reduced stress levels, more accurate information, and increased productivity.

In the short run, employees will be less efficient than they have been. This can be attributed to the training time needed to educate employees and decreased efficiency due to learning a new skill. However, employees will get better as time progresses, continuing to improve their efficiency, and changes in your processes can add to that efficiency.

Why you should invest in construction software

Investing in an all-in-one, project management and accounting, software solution will provide several benefits:

It will streamline and improve your current processes.

When a company is using general accounting software that isn’t specific to the construction industry, employees must often create new processes to track and report on data in the way that project managers or management want it reported. However, by using a solution specific to the industry, many of these processes can be streamlined or even eliminated. This increases employee efficiency and saves time and money.

It will increase productivity.

Employees have only one place to look for the information and documents they need, reducing lost time. Also, with increased accuracy, employees can rely on the information they receive, reducing time spent checking for errors. Data entry errors have cost companies millions of dollars.

Companies will need to hire fewer employees.

With improved efficiency and productivity, workers can be reassigned to other tasks, or a company may find there’s no need to hire additional workers to handle additional workflow. This saves time searching for, hiring, and onboarding new employees.

It improves industry compliance.

Construction companies have additional compliance requirements that other companies don’t. They must comply with hiring standards, contractor insurance requirements, safety requirements, as well as federal and state government pay requirements. An all-in-one construction software solution provides these companies with the tools they need to ensure compliance in all their activities.

It connects the field to the office.

One of the biggest communication breakdowns occurs between the job site and the office. Sharing data between workers in these two locations is key to completing projects in a timely and cost-efficient manner. By purchasing one software that integrates both field and office communication and data, you can save the time and headaches that occur because of miscommunication.

Helps you save more time by providing you with the latest tools.

It provides new tools, like automation and artificial intelligence, to help project teams streamline their projects and mitigate risks before they happen. Automation reduces workload by performing common tasks without human intervention. Artificial intelligence, or AI, helps project teams to predict costs and other risks before they occur so they can address them and potentially prevent them. For example, it can analyze activities and learn which ones cause the most delay or create the most risk and remind users when these tasks will be performed.

An all-in-one construction software solution, like Premier, allows companies to streamline their processes, quickly share information between the field and office, ensure compliance with industry and government standards, and take advantage of new tools like automation and artificial intelligence. To learn more about how Premier can take your construction company to the next level, schedule a demo today.

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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.