Categories
Tips & Advice

Is Manual Data Entry Costing Your Business? Why Automation is the Solution

If you think that investing in software to automate your systems will cost you more money than doing everything manually, you’re not alone. Many businesses operate under the assumption that paying for automation is more expensive than paying people to do things. The truth is there are hidden costs to doing things by hand, and those costs can significantly affect your bottom line.

We’re going to look at the hidden costs you may not realize you’re incurring by doing your data entry manually. The magnitude of some may surprise you.

1. Increased error rate

Workers entering data manually, without verification, can have an error rate as high as 4%. That means for every 50 entries, two are wrong. In an experiment in 2009, it was shown that data entry workers made up to 10.23 errors when entering data from thirty spreadsheets. This is the nature of human data entry.

When errors involve money, the stakes are high. These errors could lead to over-and underpayments, over-and undercharging customers, disruptions to the accounting and auditing processes, and may lead to financial trouble. Data entry errors have cost companies millions of dollars.

2. It takes time

Manual data entry takes time. The average typist can perform 10,000 to 15,000 keystrokes per hour. Depending on the amount of data and its form, it can take even the fastest typist hours to perform data entry. If the data requires comprehension or analysis before entry, this slows down the process even more.

It could take a competent operator between 8 and 10 minutes to enter 400 units of data. This may not seem like much, but if the volume of data is high, it can cost your company valuable time that could be spent on other workflows, like analyzing the data.

3. Can’t focus on important business tasks

With so much time spent ensuring that the data entered is correct and finding and fixing errors, there is no time left to work on the business. Managers spend their time ensuring that the data they’re reporting is accurate and less time actually analyzing that data. A survey found that 37% of manufacturing professionals don’t trust the reliability of manually entered data when making strategic decisions. If you can’t trust the data you’re getting from your team, how can you grow your business or take on additional work?

4. Inhibits business growth

When management receives data, it often makes decisions based on that information, whether it’s correct or not. These decisions may inhibit the growth of the business. For example, a costly mistake can lead managers to believe a project is over budget when it’s not. They then make moves to cut company spending to protect the company, when instead, they should be investing in future growth.

5. Hidden costs

Most companies think automation costs more than entering data by hand. The truth is there are hidden costs to entering data manually. There’s the obvious labor to enter the data, then more labor to check for mistakes, and more labor to fix the mistakes. At each level, it becomes more expensive and time-consuming to detect and correct mistakes.

It has been shown that incorrect data can cost companies up to 30% or more of their revenue. In particular, 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.

6. It’s boring

Continually spending days or hours doing mindless data entry can lead to employee dissatisfaction and turnover. When workers spend hours keying in the same information, they are bound to lose focus, which increases errors and leads to frustration. Data entry work is repetitive and tedious. 55% of employees in a survey cited the collection, uploading, and synching of data as the least productive part of manual data entry. When employees don’t feel productive, their morale lowers and they are then more prone to make mistakes.

Automation is the solution

How can companies save themselves the time and money that is lost through manual data entry processes? Automating as much as possible is one way to recoup these costs. By using machine learning and automation, the software can automate much of the data entry process, leading to fewer mistakes and speeding up the process.

Premier Software uses AI, machine learning, and automation to speed up invoice entry and other repetitive tasks, so you can spend time working on your business and less time entering data. For a demo of how our automation works to save you time and money, schedule one today.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.

 

Categories
Tips & Advice Trends & Technology

5 Reasons You Should Invest in Construction Management Software

Largely driven by the ever-changing technological landscape, the construction is rapidly maturing and evolving. Like businesses across all industries, construction companies have come to rely on software and digital tools to perform everyday tasks and complete necessary job functions like communicating with team members, tracking expenses, submitting proposals and more. 

Still, many construction companies are unaware of what a comprehensive construction management software is, how it can benefit their business, and whether or not it’s a necessary expenditure.

In this blog, we’ll discuss five reasons it’s worth investing in construction management software. 

What is construction management software?

In a nutshell, construction management software is a set of project management tools used to improve and streamline the entire construction process, from planning to project completion. While there are software options that include project management features only, using an all-in-one construction software solution to manage your accounting and project management needs means the data used to drive key decisions is always in sync, up-to-date and reliable. 

What are the benefits of construction management software?

1. Improved Communication & Collaboration

Every project, regardless of industry, requires communication and collaboration to complete. Often times, communication barriers can lead to delays, misunderstandings and errors, all of which end up costing valuable time and money. Project management tools improve communication between team members and stakeholders by creating a central platform for real-time collaboration, brainstorming and problem solving. Providing a centralized place for team members to quickly access and communicate about vital project information leads to improved planning and faster execution.

2. Time & Resource Management

Being able to effectively gauge the required amount of time and resources needed to complete a project is critical for timely delivery and success. With construction management software, tasks required to complete every step of a project can be entered, assigned and updated easily. This allows project managers and team members to know what resources and equipment are required, and when, and allows for more accurate forecasting. 

3. Reliable Job Costing & Accounting

Having a constant pulse on project costs is essential to running a successful construction business. However, many companies use separate systems for accounting and projecting management that don’t communicate in real-time, which results in errors, inaccurate reports and untrustworthy data. An all-in-one software solution that ensures job costing and accounting data are synced means the information is current and reliable, and thereby allows informed decision making that reduces the likelihood of waste or over-budget issues. 

4. Document Sharing & Control

Because every step of a project requires some sort of documentation, construction companies have to deal with a lot of paperwork. A document management system provides a centralized place where critical information (like blueprints, wireframes and specifications) can be stored, managed, updated and accessed by those who need it. Construction documents are often complex and evolving, so having that information digitized, simplified and stored on the cloud saves time and reduces margin of error. 

5. Detailed Reports & Insights 

Construction management software records every phase in the construction process, and that data can be accessed at any time to analyze a project and to provide valuable insights that allow for informed decision making about next steps. Consolidated dashboards with various reporting options make it easy to digest and consume pertinent information, and provide the ability to drill down into the accounting information to view invoice or payment details, or to identify any red flags or pending approvals that may hinder project progress.

Is construction management software right for your business?

In this blog we’ve touched on five key benefits to using a construction management software and how it can help streamline processes, improve resource planning, enhance collaboration, and provide critical information needed to keep projects running on-time and at-cost—all of which ultimately lead to higher profitability.  

If you’re curious about Premier Construction Software but want to read reviews before contacting us, click here to learn more about us on GetApp.

Or, if you’d like to know how our all-in-one solution can be tailored to meet your business needs for maximum impact, click here to schedule a personalized product tour today. 

 

Author Biography:

Kathryn Dressler is a content strategist with more than 10 years of experience across the spectrum of marketing services, including blogging, social media, public relations, copywriting and editorial services.

Categories
Industry Insight

Progress Billing – A Better Way

Construction Projects typically involve many different trades in order to reach completion. Therefore, it can be just as a daunting a task to submit for payment to a client along the way. Owners’ of the construction projects rely on the project architect, Lender and at times, a third party Inspection Company to make certain that payment is applied correctly and within reason. Once the progress billing definition is truly understood, you will smoothly pass through the steps of preparing as well as submitting everything that is needed to complete a construction project.

Start with a Good Schedule of Values

  • A schedule of values is a list that each dollar amount is assigned to within each area of work that will be completed on a construction project. Construction projects are broken out by each scope of work and are typically separated according to the Construction Specifications Institute Divisions (CSI). Therefore, it is best to separate a project’s Schedule of Values into basic CSI divisions. Examples of these divisions are General Conditions, Site work, Concrete, Steel, etc. Once the areas of the scope are defined, then a corresponding value is assigned to each one so that a percentage complete can be established for each item as progress is made on the project.

Establish the Rate of Construction Retainage

  • A construction contract will typically require that “Retainage/Holdback” be withheld from each application for payment in order to provide the Owner or Lender protection from the Contractor due to not completing the entire project. 5% or 10% may be withheld from each payment to the Contractor and the funds that are held in reserve until the project punch list is completed at the end of the project. Each progress billing must take this retainage/holdback amount into account on each line item of the schedule of values and ultimately on the bottom line of the application.

Establish the Frequency of Progress Payments

  • A progress billing is exactly that, a billing that progresses towards completion a percentage at a time. It is necessary to establish the frequency that each application shall be submitted. A progress billing must specify the current period percentage of completion and the cumulative total – this must be done for both the individual items and the total as well.

Establish the Percentage of Completion

  • Vendors will submit their invoices for payment to a Contractor for the amount of work that they have completed over the period. A contractor must confirm that the work has actually been completed according to this percentage and then must include the corresponding amount within the progress billing to the Owner or Lender.

Submit it Right and Get PAID

  • Progress billings are often rejected by an Owner or Lender because of incorrect completion percentages, incorrect math, or applications that are submitted tardy. In order to achieve profitable progress billing revenue recognition, effect processing is important. Make sure to review vendor invoices and percentage completions with field supervision in order to avoid over/under billings and submit your progress billings report on time!

Premier generates the standard billing applications. The format of this report is user defined. You can choose to format the layout, the number of decimals, whether or not dollar signs are incorporated, apply a default % for retainage/holdback etc.

There are 3 steps required for progress billing:

  1. Add & Configure the Progress Billing Report
  2. Add the Progress Billing Lines
  3. Run the Progress Billing Application

 

Sample Progress Billing

progress billing

 

 

Categories
Job Costing Resources

Importance of Job Cost Reporting

Valuable job cost reports provide crucial information about the current status of a job and can help estimate how you will finish on each job from a cost and revenue perspective. If you have many jobs in progress it can be difficult to manage, which is why it’s important to understand the reports so you can quickly identify exceptions and job overruns before it’s too late and address them accordingly.

In order to ensure you have real-time reports, you will require a truly integrated construction accounting and job costing software solution. It’s important to map out electronic workflow processes to ensure accounts payable invoices, purchase order and subcontract commitments are entered in as quickly as possible and distributed to the proper job allocation. If there are many jobs in progress, there is a strong chance that costs will be incorrectly assigned, but the function of the job costing system makes that highly auditable.

Job costing provides discrete “buckets” of information about each job so that the accountant can allocate costs directly to the job and division code, commonly referred to as the cost item. Advanced software solutions such as Premier provide cost item grouping and up to five levels of job cost breakdown for greater transparency.

If a job is expected to run for a long period of time, then the cost accountant can periodically compare the costs accumulated in the bucket for that job to its budget, and give management advanced warning if costs appear to be running ahead of projections. This gives management time to get costs under control over the remainder of the project, or possibly to approach the customer about a billing increase to cover some or all of the cost overruns. A considerable amount of costing precision is required especially when dealing with cost plus contracts where the customer pays all costs incurred. In most companies, controllers may cost code a job incorrectly which can misrepresent the job cost breakdown. For situations such as that, electronic approval systems are becoming a must have when evaluating job cost accounting software solutions.

Another advantage of utilizing proper job cost tracking is that you can better ascertain whether specific jobs are desirable to pursue in the future or what changes should be made next time bidding on similar work. It can be time consuming to enter in all the costs to the proper cost items but the introduction of mobile apps and proper job cost accounting software allows for real time costing and makes it easier to capture the information, thus leading to greater efficiency in the long run. The lack of detailed job cost reporting is why companies end up moving away from smaller accounting focused programs such as QuickBooks.  Here are a few sample reports that you should be able to run directly out of your accounting job costing system to determine variances, work in progress, and if you are over or under billing. Click HERE to see how Jonas Premier can help your business!

 

Job Cost Reporting #1

Job Cost Reporting #2

Categories
Industry Insight Resources

What to Consider When Looking For Construction Accounting Software

With all of the advancements in software functionality over the years, making a decision on the right construction accounting software that meets your needs can be difficult to say the least. Finding a solution that can seamlessly handle job costing, project management, progress billing, document management, and accounting is not an easy feat. The good news is that an integrated system such as this already exists. With that being said, there are key factors to consider when deciding on which construction accounting solution is right for your business.

Automation

The level at which your accounting system automates processes can reduce the amount of manual entries and double data entry. With less manual entries being made, there will be less chance of errors such as duplicate or incorrect data entry. Automation can also lead to greater employee satisfaction, as the amount of monotonous work will be reduced and more time will be available to complete more value added tasks and close your books faster.

Integration

Without a fully integrated construction accounting solution, consolidating information is difficult to say the least (as most of you reading this are well aware). From the office to the field, an integrated accounting system automatically consolidates information between these functional areas, thus reducing the time and effort it would take to consolidate manually. For example, field workers enter their hours directly from the field using the Jonas Premier Field APP, which then automatically integrates with payroll and all that is left is to approve the information submitted! No more entering hours from a manual worksheet and struggling to get your field workers paid on time.

Flexibility

Each business is different and having the ability to make changes on the fly is essential to staying ahead of the curve in the construction industry today. With a flexible construction accounting system, you can customize and adjust the functionality to adapt with the changing needs of your business. An example of this can be seen with editing prior periods. Jonas allows you to enter information into prior periods, providing you with the flexibility to go back into an accounting period and make changes or updates as necessary.

Reporting

Being able to audit and drill down to the electronic documents allows for reconciliation with ease and improved reporting capabilities. A great example of this is ad-hoc reporting. With Jonas Premier, ad-hoc operational and financial reports can be generated quickly and easily. This tool provides a fast way to generate and review multiple reports whenever you want them and automates the distribution as well.

Customer Satisfaction

With all of the day-to-day tasks we perform, we can sometimes forget about the customers we are dealing with. Having a construction accounting system that creates simple and configurable reports, contracts, and invoices will improve customer satisfaction. Having professional and easily understandable documents sent to your customers will help to reduce any further questions they may have and keep operations running smoothly.

 

Click the link to learn more about Premier Construction Software today!