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Industry Insight Tips & Advice Trends & Technology Ultimate Guide

Why Forecasting Project Costs Is Important For Your Construction Business

From day one on a construction project, the number one question everyone has is whether the project will meet the expected budget. You can wait to answer this question at the end of the project when you can’t do anything about it, or you can assess where the project stands as you progress through the work, allowing you to act proactively if an overage is found. In order to assess the project costs before completion, however, you must forecast or predict the potential costs to complete the work.

A forecast to complete the project is a well-educated guess of how much you have left to spend to finish the work. It’s based on the current costs, the percentage of the project that’s complete, and what’s remaining to be finished. The better you are at tracking your costs, the easier it will be to predict how much is left to spend.

Before we get into how to forecast final costs on a construction project, let’s look at why it’s important to know how much the remaining work will cost you.

The importance of forecasting final costs

One of the primary benefits of forecasting costs is that you get an early warning if a project is losing money. Since many contractors rely on their profits to fund future work, losses on today’s job can quickly lead to real problems when it comes time to start the next one. Without adequate profits to fund the work, contractors have to rely on alternative financings, like bank loans or credit cards, that ultimately cost them more in the long run, further reducing profits. It’s a never-ending cycle of higher costs.

Predicting final costs also allows companies to identify their future cash flow needs and address any issues before they become real problems. If contractors know that they won’t have enough money coming in to finance their payroll or other necessary business expenses, they have time to move money from investments or seek lower-rate financing options.

Sometimes forecasting final costs can help contractors identify change orders that have been missed or haven’t been processed yet. If a change hasn’t been made to the project budget but extra materials have been paid for or work has been completed, it may show up as a cost overage. The contractor can then follow up with the owner or architect to determine the status of the required change.

Finally, forecasting allows companies to learn valuable lessons about the accuracy, or inaccuracy, of their estimates. If a contractor is always going over budget on labor costs, they will see that sooner and be able to adjust future budgets accordingly. This will make their estimates more competitive and lead to more work.

How to forecast final costs

One of the most important things you can do to help forecast final costs is to monitor costs as you go. If you’re relying on data from a single point in time to predict costs, it can be difficult to make the appropriate assumptions and gather enough data to accurately predict future costs. By tracking costs as you go, with an accounting system that supports job costing, you’ll be able to monitor the project’s progress and see cost patterns that may not be visible with a static report.

To forecast final costs, you’ll be looking at three data points: the amount remaining in committed costs, amount remaining in your budget, and historical costs. Based on these three data points you should be able to predict, with a reasonable degree of accuracy, the final costs for a specific scope of work. Let’s look at an example to help illustrate how these data points help predict future costs.

Let’s say we are forecasting costs for the concrete scope of work on a project. The contract with the concrete subcontractor was originally for $100,000, and they have billed $80,000 so far, leaving $20,000 to bill. This is the amount remaining in committed costs. Based on our original budget, we know that we still need to purchase some rebar that wasn’t part of the concrete contract for $5,000. We also know, based on reviewing past projects and the amount of work left to be finished, that we have about $30,000 in work remaining to be completed. So, how do we predict what our future costs will be?

Remaining committed costs:                       $20,000

Remaining in the budget:                                     $5,000

Historical data:                                                  $30,000

The answer will be somewhere between $25,000 and $30,000, depending on whether we are looking at it for cash flow reasons or to assess what our profit margin is for this particular project. Either way, we are using the three data points to inform our prediction and will continue to improve the accuracy of each prediction as we analyze the data on more projects.

What to do when you’re over budget

The second most important question, after “Are we on budget?” is what to do when you’re over budget. The answer depends on why you’re over budget.

  • If there has been a change in the project scope that affects the budgeted costs but hasn’t been reflected in a change order yet, that could cause an overage.
  • If there was an unforeseen condition, such as bad soil, that caused additional costs, this may cause an overage.
  • Or, if the general contractor or a subcontractor made an error in their work, that could also cause a budget overage.

Depending on the cause, the contractor will need to either ask for a change order or make an internal budget transfer. The internal budget transfer will move excess monies from one line item of the budget to another to help cure the overage. It’s important to note the reason for the transfer for future lessons learned.

How Premier helps you predict future costs

Premier has made forecasting future costs in your projects easier with its forecasting module. Using this module, project managers can account for unexpected costs and request internal budget transfers to cover overages.

To see how Premier can help keep your projects on track, request a demo.

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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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Company News Industry Insight Resources Tips & Advice 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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Features Industry Insight Tips & Advice Ultimate Guide

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.

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Industry Insight Tips & Advice Ultimate Guide

The Pains of Data Entry and How To Solve Them

Few industries can rival the construction industry’s reliance on data. With so many moving parts in the form of contractors, subs, materials, inspectors, compliances, and accounting, having accurate data to work from is critical to keeping the job on track. However, the industry’s approach to data entry is antiquated at best.

But when someone does something long enough, they may struggle to realize inefficiencies or that there are better ways to do things. This couldn’t be more true for the construction industry, as many contractors have simply accepted the pains of data entry. But, there is a better way to get the job done with more speed, accuracy, and corroboration.

The Challenges of Data Entry

Data entry gets a bad reputation, and it’s usually for good reason (or several, for that matter). The following are some of the challenges that contractors face with data entry, and they certainly contribute to data entry’s bad name.

1. It Can Be Slow

Data entry is a painfully slow process. First, someone has to record the data—something that is often done manually in construction. Then, someone needs to sit down and enter the data into the system, piece by piece. Finally, that data is then used to form different reports and values, helping the contractor make informed decisions.

All of this takes valuable time from at least one of the contractor’s staff members, but likely three or four. This time spent can quickly equate to money lost, especially if those reports don’t contain the latest data or an error renders them useless.

2. It Can Be Inaccurate

Any time a human is responsible for data entry, that data is susceptible to errors or inaccuracies. Whether it’s that a decibel is in the wrong spot, the person entering the data can’t read the handwriting of the person who recorded it, or they’re inputting the data in the wrong place, mistakes will abound.

One small error extrapolated over several reports can be a serious issue. Not only can this cost the contractor all of the value they could’ve hoped for from the reporting process, but they might make critical decisions based on data they believed to be correct or up to date, only to find out it’s not.

3. Storing and Organization Can Be a Pain

Getting data into a system is one thing. Storing it and organizing it is an entirely different animal. With the amount of data that a typical project creates, file cabinets full of reports and data points just won’t cut it anymore. But, electronic reports saved individually to a local storage system aren’t much better.

Contractors that aren’t using a platform to sort and store their data are wasting time and potentially money. It can take longer to compile a report, make decisions, or avoid mistakes. Conversely, when that important information is readily at-hand, contractors can be more nimble and make better decisions.

4. It Can Be Hard to Access

Accurate, well-organized data and the reports that it comprises are great, but accessing them can be a nightmare. A report stored on a localized system back at the office won’t help with game-time decision-making, leading to contractors choosing between wasting time or flying blind, both of which can be very costly mistakes.

Also, poorly organized data can affect the way business is handled. Investors, executives, and partners rarely enjoy waiting for reports just to see how the latest project is stacking up. And, they want to know if things are on track with the very latest data. This situation can get even worse when the contractor, their clients, and the other parties are using different systems to access their reports.

Construction Management Software: Data Entry Solution

Luckily, construction data entry and many of the issues that go along with it are easily solved with Premier Construction Management Software.

1. Automated Workflows Reduce the Opportunity for Errors

One of the best ways to reduce data entry errors is to simply reduce data entry. Premier Construction Software provides automated workflows that allow users to input data and automatically distribute it to the folks that need to review, approve, or deny it. Since the staff isn’t re-entering the same data on several reports, there are fewer opportunities to introduce errors.

2. Gain Access from Anywhere

Premier’s all-in-one software solves data access issues, as well. By using cloud-based storage, Premier allows users to review data, reports, and even drawings from anywhere in the world. All they need is a web-enabled device. Contractors, clients, and decision-makers can quickly check the documents to make better decisions at the moment.

3. Standardized Systems

One of the most important aspects of all-in-one construction software is standardizing the systems which everyone uses. Rather than using four or five software platforms in-house to store and view documents, or potentially more across several clients and subcontractors, Premier provides access to several parties to the same platform. Again, this reduces the opportunity for error but also ensures everyone has access to the same data.

4. Automatic, Real-Time Updates

Data is only accurate if it’s up to date, and that’s one of the most significant hurdles that Premier’s all-in-one software handles best. Every time a change occurs within the system, whether it be a budget item, a schedule change, a compliance expiry, or a materials change, a whole-system update is triggered.

Any report affected by these changes will automatically reflect the new value. Anyone accessing those reports will see the most up-to-date data, allowing them to make the best decision possible with real-time information.

Simple Process

The biggest benefit of streamlining the data entry and management process with Premier Construction Software is how easy it is to implement. Premier’s team will help contractors implement their software, training their staff to use each of the features seamlessly. And, if any issues arise or staff has questions, each company will have one account manager to help them navigate the challenge.

Contractors using Premier software will be able to set up their own customized workflows, allowing them to use real-time data to create forecasting reports, job costing, and accurate billing. This translates to less time spent entering data, and fewer mistakes—something all construction companies should strive for.

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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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Industry Insight Tips & Advice Ultimate Guide

The Ultimate Guide to Customer Support: How Support Impacts the Health of Construction Operations

So, your company is thinking of upgrading to a new, streamlined construction software program and ditching that old, generic software. But, one of your biggest qualms is that the new software may be hard to use, or confusing, or maybe integrating into your day-to-day business activities will be impossible. Maybe you’re worried about something going wrong with the software down the road.

What would you do then?

You’re right for taking this transition seriously, as it’s a big change for your company. However, with the right customer support, you won’t have to face these challenges alone. Customer support and account management in construction software are one of the most important features to look for before choosing a product. This guide will explain why.

The Importance of Customer Support in Construction Software

The construction industry thrives on building structures and renovating spaces. Time spent ironing out the wrinkles in a software program or transitioning to new technology can slow that down. For those reasons and more, construction software support is incredibly important.

1. It Helps During the Launch Phase

Transitioning from simple, stand-alone, and feature-limited software to a fully-functional software program may seem overwhelming for your construction company. Teaching employees that are used to old-school spreadsheets and programs designed over 40 years ago won’t be easy to do on your own, despite knowing the value it will bring in the end.

Customer support is at its most important during this stage of the game. The best construction software companies will offer one-on-one and group training to prepare key employees for the role, allowing them to lead the way for other employees. This training can last from a few days to a few weeks, depending on the company.

For example, Premier Construction Software’s initial training program lasts six weeks. During that time, employees learn how to run a fictional business using the software program. By the end of the six-week period, the business goes live and is fully functional with trained employees who know how the software works. Whichever construction software you choose should come with a similar level of start-up support.

2. Issues Happen Along the Way

Even the most well-oiled software might experience a snag every now and then. Most often, it’s a user error and the user doesn’t even realize it. Sometimes, there’s a hardware issue that needs to be identified. It’s rarely an issue with the software or an update, but it can be a possibility.

The problem is your company can’t come to a screeching halt because the software decided to take a nap. Your team needs that software back up and running as soon as possible in order to focus their efforts on other important functions.

For those situations, there is no replacement for expert customer support teams. These professionals should have the knowledge and ability to get your company’s data entry, drawing organization, storage, and accounts payable or receivable back up and running.

But what does solving this business emergency look like? Will your representative have to spend hours on hold, or wait for a response to an email? That’s the case in some situations. Other construction software programs assign an Account Manager to each client, giving them a point of contact to reach out to in any situation. They’ll get the ball rolling and ensure that the customer is receiving the attention they require.

3. It Avoids Growing Pains

Like most companies, the goal is most likely to grow and take on more, bigger, or more valuable projects. But, with that expansion comes growing pains (especially with some software companies). Creating new users, tracking changes, and ensuring everyone see the documents and data they need can be a challenge during this phase of growth.

Streamlined and automated construction software equipped with top-of-the-line customer support can minimize the impact of these growing pains. Customer support can help with managing new and old user accounts in and out of your organization, integrating expansions or updates, and tracking changes or adjusting workflows to ensure everyone is accountable and involved.

It can’t be overstated how important an expert customer support service team is to a construction company at this phase. Rather than users chasing their tails and making more work for themselves, a customer support representative can help the user identify the correct feature to use, how to track an error, or which update they need. The user can then learn how to avoid this mistake in the future, making the time spent working with the support professional well worth it.

Make Sure Your Construction Software Includes Customer Support

If you’re shopping for new construction management software, don’t overlook customer support. This is one of the most critical aspects of ensuring a construction software program integrates with your business and helps take it to new heights.

The success of a construction business is a reflection of the choices of employees, customers, stakeholders, and their organizations. These decisions can play a critical role in determining the success of your organization.

Not to worry, Premier has your back. From the very beginning, we will ensure you feel fully supported and successful. End the wait today and get your business back in financial control.

Schedule a demo today

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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.