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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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Industry Insight Tips & Advice Trends & Technology Ultimate Guide

From Good to Great: The Power of UX Design in Software Products

Software is supposed to solve a problem. Whether it’s simplifying tasks that humans struggle with or just streamlining the workflow process, companies spend money on software in order to make their day-to-day operations run smoother. But for this to occur, the development company has to focus on the end users’ needs and wants. And that’s where good UX design comes into play.

Why is good UX design important? The reasons are endless. However, we’ll discuss 9 of the most important reasons here. Keep reading to find out what they are.

What is UX Design?

Before we dive too deeply into UX design, it’s important to understand what it is. It’s become something of a buzzword in the industry over the last few years, but a quick breakdown could be helpful.

UX stands for “user experience.” UX design is the process of developing a product, whether it be a website, software program, or device with the end users’ experiences in mind. With that description, good UX design sounds like a no-brainer, but it takes an experienced team of developers and designers to make it happen.

There are decision trees and formulas that developers use to ensure they’re implementing good UX design, but that’s far beyond the scope of this article. At the core, the development team considers who the user is, what their challenges are, and how the software can solve those challenges in the easiest and most efficient ways possible.

UX designers use market research, product development, strategy, design, and lots of testing to ensure they’re creating a product that is attractive, effective, efficient, and easy to use. That’s good user experience design in a nutshell.

This isn’t wildly different from the construction design process. Engineers, designers, and architects constantly consider how the buildings and infrastructure they create will impact the people using them during the design process.

9 Reasons Why Good UX Design is Important in Software

It might be easy to understand that good UX design is important, but all of the ways it can impact the end user might not be so obvious. The following are 9 reasons why good UX design is important when choosing a software program.

It Leaves a Lasting Impression: Good and Bad

UI (user interface) gives the user their first impression, but UX creates a lasting impression. How smoothly a software program runs, offers intuitive workflows, and allows the user to find the solutions, data, or reports they’re looking for will create an opinion of that program for the user. If the UX is subpar, even if only at the start, users will feel frustrated over just the thought of the software.

However, if that software is fast, intuitive, and provides answers without digging through multiple tabs in error, the user will remember it. They’ll have a much more favorable opinion of the program and rather than feeling dread when they log in, they’ll feel positive that they’re going to achieve their goals.

It Provides Value

Good UX design is not a mistake. It’s the result of a development team focusing its efforts on developing exactly the type of software that the user needs. This means the team won’t be spending time or energy developing aspects of the program the user really can’t use.

In the end, this streamlined and targeted development approach means less wasted resources, and this means a more affordable product for the end user. They’ll be able to get more value from the program because it was designed to solve their specific challenges and nothing else.

It Makes Learning Easier

Regardless of the software program, there is always a learning curve or implementation period where users have to get used to the new processes. Whether it’s the layout, workflow, or integration with other software programs, users need to learn how the new system works and deal with the bumps in the road.

Good UX design can pave those bumps and make learning the new system much easier. With a well-planned layout, intuitive workflows, and the ability to make adjustments that scale across multiple reports automatically, using the program can become like second nature.

It Ensures the Program Will Fit the Users’ Needs

Good UX design involves developing “personas,” or creating a fictionalized version of the ideal real-world user, and developing the software for that persona. Developers will take into account all of the user’s daily activities and responsibilities and the challenges that those activities and responsibilities create, and come up with a tailored solution.

In terms of construction, this ensures that the software meets the needs of the people in the building industry. An effective UX design will account for the project types, contract types, personnel, reports, and accounting that the construction industry uses. There are no useless functions or fluff to deal with.

It Encourages Widespread Adoption of the Software

It’s one thing to decide to implement new software and another thing to actually get everyone on board. While there are always a few folks that will resist change, a good UX design can help pry those old spreadsheets from their desperate clutches.

When a program is designed well and works as it should, the team will notice. Folks will start to show each other how certain functions are saving them time and frustration over the old program. And while a program champion must still learn the software and introduce it to the team, a good user experience can make implementation effortless.

It Reduces Reliance on Customer Support

How often do we get frustrated with a program, app, report, or input point and have to call customer support, only to realize the solution was simple? It was just a toggle buried in five layers of user settings. If we’re all being honest, the answer is “too often.”

While great customer support and service are critical to any software program, good UX design minimizes the users’ need to lean on it. By using simple, easy-to-adjust settings and input points, well-designed programs allow users to understand what they’re doing, make adjustments, and see an impact instantly. If something doesn’t seem right in a report, they should be able to access that report immediately and fix the issue without digging through tab after tab to get there.

It Helps Users Serve Their Customers Better

When a company decides to implement new software, the goal should be to simplify processes in order to run smoother and more efficiently. It can change the way the company handles almost all of its most important office work. And you better believe this transfers to the customer.

When a customer, partner, or lender calls a well-run construction company and requests an update, the latest report, a change order, or just clarification, good UX design really shines. A company rep should be able to log in, access the account, and pull that report or make that change in seconds. And if they’re using a program that simplifies data entry and provides automatic updates, they know all of those changes will be reflected across the program.

Not only does this mean serving the customer faster, but it also means providing them with accurate data. Good UX design lessens the chances of mistakes and oversights, and this makes it one of the most important aspects to look for in a software program.

It Promotes Communication

No one understands the importance of communication better than a well-oiled development team, and this often trickles down to the software. Good UX design involves creating channels and avenues that teams can use to talk to each other, work on the same project, and simplify communication.

In many cases, this means using cloud technology to ensure everyone has access to the same data at once. Any changes they make can be sent automatically to the folks who need to know about them, as well. This type of communication promotes collaboration and responsibility—all because the software was designed to do it.

It Directly Impacts Profitability

At the end of the day, any new tools or software that a company implements should improve its profitability. Good UX design, with its focus on efficiency and automation, can do just that.

With less time spent on data entry, updating reports, fixing mistakes, and tracking down signatures, office staff can focus their creative efforts on other projects. Those projects can then help the company move forward, improve its efficiency, and make better decisions. Only a software program created with great user experience design can offer the type of freedom a team needs to work like that.

 

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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 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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Features Industry Insight Tips & Advice Ultimate Guide

The Ups & Downs of Using Multiple Construction Systems Vs. an All-In-One Solution

If you’re considering making a change to your construction software, you’re probably wondering if you should stay with your existing way of doing things (usually multiple systems for multiple functions) or if you should integrate all your software needs into one central system. All-in-one solutions, like Premier, can take the place of document management, accounting, and project management software.

To help you make this decision, we’ve listed some of the benefits of staying with multiple solutions (because there are some), as well as the benefits of moving to an all-in-one solution. While cost is, and should be, a part of this decision, there are many other things to consider before deciding.

Benefits of using multiple software systems

  • If you’re using multiple software systems, say one for field communication and one for accounting, and it’s time to make a change to one of those systems, either an update or a software change, fewer people are affected by the change. Only the field or accounting department has to be trained on the new system, change processes, and work out the bugs. This can be less frustrating than having the entire company learn a new program together.
  • Let’s talk cost. Generally, software systems targeted to just the field or the office are less expensive than all-in-one solutions. They usually offer simplified processes that are targeted at a few pain points, so the costs to implement and purchase them are lower. Of course, this means that their capacity is limited, and you may not have access to more advanced functions if you need them. For example, many construction companies use Quickbooks for accounting, even though it lacks many of the tools and workflows necessary for contractors. In order to tap into these advanced functions, you’ll have to invest in a software that is structured specifically for the construction industry.
  • Depending on the structure of your business, using multiple solutions may fit your needs better. Very small companies, with only 1-2 employees, may not require the robust features of an all-in-one, and investing in such a system would be a waste of money for a company that small. However, as the business grows, so will its needs, and soon it will outgrow the capacity of these solutions.
  • Probably the biggest perceived benefit of using multiple systems, if you’re currently doing so, is that you don’t have to change what you’re currently doing. The fear of change and the havoc it can create keeps many companies from growing and adopting new tools. Transitioning to new software doesn’t have to be stressful when you have the right team and the right software for your business.

Benefits of all-in-one software solutions

  • One of the benefits of using an all-in-one software solution is that there is one centralized location for all your data and files. No more searching desktops, laptops, and the cloud for the information you need. By making the information available through the internet, your team members can get the data and files they need no matter where they are and what type of hardware they’re using. No more lost data.
  • With an all-in-one system, entries made in one part of the software are automatically sent where they need to go to update the entire system. For example, an AP invoice will show up immediately on budget reports, open AP reports, and the project’s work-in-progress report. Double entry isn’t required. This ensures that everyone can see the same data at the same time, and you don’t have to worry about whether the cost data has been synced with the project management data. It’s all in one system.
  • Everyone has access to detailed cost data, allowing them to drill down to the transaction if necessary. Synced data in other systems may come across as a summary of costs, not allowing a project manager to see the detail of those costs. Of course, everyone can only see the records they’ve been given permission to see, ensuring privacy when necessary.
  • An all-in-one solution grows as your company grows. You can add users and functionality as the need arises. Taking on new types of work or responding to requests for new reports or cost data can easily be accommodated without having to change systems or upgrade software.
  • Automation allows your team to save time so they can work on more pressing tasks. Automated AP invoice entry, pay-when-paid payments, and notifications allow your team to spend their time doing the really important things, and not babysitting the software system. Automation can also reduce the need for double entry, saving you from countless errors and time searching for them.
  • Instead of spending time on processes you’ve developed to work around the limitations of the software systems you currently use, you can streamline those processes and save workers time and money. For example, a worker enters a change order into the project management system, then has to enter the same change order into the accounting system. While in the same time it took them to enter the CO twice, with an all-in-one system the CO would be entered in both accounting and project management, and a CO issued to the appropriate subcontractors, as well.
  • When information from the project management and accounting systems are combined into a dashboard managers can see the big picture of how the company is running. New synergies can be seen when the data is presented together, and management can act quickly based on trends. Without a central system, creating these dashboards requires combining the data by hand, which leaves room for errors and takes time.

If you’re looking for a single solution for your accounting, project management, and document control needs, look no further than Premier. Afraid of change? Our team will work closely with you to ensure that the transition is as smooth as possible.

See how we can help, schedule your demo today to get started!

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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.