Builders can now combine building management software with bookkeeping software to review real-time costs and monitor cash flow — right from the field.
Custom software applications have enabled many different types of businesses to operate more efficiently than ever before. New specialized cloud-based software tools, developed across broad sectors ranging from nonprofits to healthcare to information technology and professional services, are now essential tools required to enable entrepreneurs in their respective fields to compete and succeed in their markets.
Perhaps no industry could benefit more from this revolution in software than the building trades. Here's a look at how contractors can use these tools to be more successful.
Building a Better Toolbox
Even under the best of circumstances, the building trades are difficult to manage. It's the nature of the business. Buildings are big-ticket items that promise large potential profits, but only after the builder or developer lays out substantial cash upfront and waits patiently — years, in some cases — for the final big payday. Since most builders juggle multiple projects at the same time, while spending a lot of time in the field, keeping tabs on the company's expenses and cash flow is difficult, yet critical.
A variety of apps are now available for that purpose. These apps run the gamut from comprehensive project management tools that incorporate changes in design concepts, schedules, budgets, client communications and job costing, to basic bookkeeping and accounting programs specific to the construction industry.
Bookkeeping software can be integrated with web-based construction management software to help employees and contractors accomplish many tasks right from the field, such as:
- Entering time on specific projects on a smartphone or tablet, capturing change order costs and filing approved permits
- Reviewing and approving subcontractor invoices and proposals and reviewing real-time costs and vendor quotations against budgeted expenses
Client, contractor, building inspector and vendor communications, including progress pictures regarding a specific project, can be stored for a job in the cloud to reduce the chances of miscommunication and to capture expenses and opportunities for change order revenue. With more real-time data and information, builders can better manage margins, budgets and cash flow — vital metrics in the construction industry.
With some programs, clients can log in to their specific job in the cloud and see real-time communications; their project budget, filed permits, invoices, payment and project status; and progress pictures of their project. The contractor can specify how much of this information is readily available.
A Constructive Step
Business leaders in the building trades can be more efficient with their time — and take on more projects — by combining workflow planning and online tools with the appropriate support. An outsourced bookkeeping services provider with expertise in construction and cloud accounting can set up online systems to enable the builder to take advantage of these time-saving tools.
For instance, as a successful custom homebuilder put it, "The homebuilding business is heavy on payables, so there's a lot of check processing. We take in five to seven checks per job, but we write about 500 per job. Based on my experience, I knew it could get overwhelming to do it properly. So outsourcing made a lot of sense."
Improving Profit Margins
Builders can use construction management software that links to bookkeeping software to:
- Reduce construction errors by improving communication
- Catch change orders that were previously missed or not accounted for in their entirety
- Increase client satisfaction by enhancing credibility and professionalism
- Help reduce employee turnover by providing better tools for project managers
- Enhance inventory management
- Improve competitiveness by enabling more accurate estimates with comparison of actual project performance
Are you ready to get on board?