For construction companies, time is money. Both in the field and the office, time wasted is money lost. Using out-of-date processes and multiple software programs can quickly eat into slim profit margins. Construction companies must rely on technology to make their processes faster and avoid errors. If they don’t, they will continue to spend money and time fixing problems and repeating work.
Although no one has a crystal ball to tell exactly what the future holds, here’s where we think construction is headed:
Smart contracts will make the payment process faster. Technology will assess how much of the work has been completed, and payments will automatically be distributed to those contractors who have completed the work.
The software will analyze compliance documents, and automatically notify all pertinent parties when insurance or licenses have expired. Contractors will be able to submit compliance documents directly through a portal, where the software will analyze them and gather the required information.
All the documents that pertain to a specific project will be organized and searchable in one location. All team members will have access to these documents, and paper files will be a thing of the past.
Accounts payable invoices will be scanned by software, and the information will be automatically entered into the accounting system. The software will provide analysis and let operators know when contracts are overbilled or change orders are not updated.
Payments to subcontractors and suppliers will be processed automatically by the system, without the need for checks or other paper documents. Payments will be tied directly to the completion of the work.
Artificial intelligence (AI)
Project software will be infused with artificial intelligence that allows the software to provide predictive analysis based on past project data. As contractors process projects through the software, they will learn what activities cause the most delay or create the most risk and remind users when these possibilities occur.
Using the Internet of Things (IoT) and wearable technology, the software will be able to analyze the completion of work in the field. It will then compare that information to the project schedule to determine if there are any delays. Parties will be notified when the schedule slips, allowing the team to proactively respond.
Machine learning, a subset of AI, will assist estimators in project bid analysis, allowing them to select projects they will be the most successful on. AI will also identify the most common bidding errors and correct them before they bid goes out.
Photos will be taken of each worker as they arrive on-site and will be analyzed to determine if the proper personal protective equipment (PPE) is being worn. If there are missing items, the system will notify the worker and their supervisor, allowing them to correct the problem.
Problems with the status quo
Currently, construction teams work with a hybrid of software and paper documents. While some contractors strive to go paperless, many still rely on paper documents for certain activities, like material takeoff. This dual approach leaves contractors open to the following problems:
The process of entering and analyzing information by hand takes more time than an automated system. Systems are available that capture data automatically directly from documents and provide analysis, saving contractors time.
Paper documents are often lost or misplaced when they are filed incorrectly, or not filed at all. Even teams that rely on software often use multiple systems for different purposes (estimating, project management, accounting). This confuses users who don’t know where to look for the information they need. This takes extra time to determine the correct system and find the data they need. If documents are lost or misplaced, more time is lost in searching for them or re-creating the documents.
Errors are more likely
An experiment in 2009 showed that data entry workers made up to 10.23 errors when entering data from thirty spreadsheets. Data entry errors can cost companies millions of dollars. Workers can spend more time searching for errors and correcting them than in the initial data entry.
Hidden costs of mistakes
Besides lost time finding and correcting mistakes, it has been shown that incorrect data can cost companies up to 30% or more of their revenue. A 2018 Goldman Sachs report stated that the direct and indirect costs of manual paper invoice processing are $2.7 trillion for businesses around the world. The hidden costs of manual data entry can be enough to make or break your business.
Benefits of new technology
Embracing automation and other technological improvements can save companies real money.
- Work is performed faster.
- When there is only one integrated source of information, less time is wasted searching.
- Accuracy is improved with automatic data capture.
- Time and costs are saved by limiting time wasted on rework, searching through data, and fixing errors.
In a nutshell?
If your construction company is wasting time on manual processes and paper documents, it’s time to embrace automation. Premier Construction Software can help you reduce errors, speed up data entry, and waste less time looking for information. We bring the power of automation, artificial intelligence, and machine learning to construction accounting and project management. For more information on how our software can save you time and money, contact us today.