5 Benefits of Construction Job Costing Software

Contractors continually tell us that job costing, and managing job profitability, is one of the most difficult initiatives they have to tackle. Not because math was their worst subject in school, or because they lack business savvy. The reality is that for many contractors lack the resources needed to accurately assess they’re business for accounting and estimate accuracy. I argue that it doesn’t have to be this way. The following six benefits of job costing software are more like 6 reasons your company needs job costing software.

1. Real time data

Real time data allows managers and decision makers to receive accurate, actionable and timely data on-demand. By entering job budgets, change orders, purchase orders, tool inventory and labor costs in real time (as they take place), managers are enabled to keep tempo with the business.

2. Easy reporting

Most contractors know how profitable they are on a per job and yearly basis. What most don’t know is why? From time to time we speak with a construction company that tells us that they really have no idea how many tools they are loosing, what maintenance and equipment down time costs or how much scrap material was left over, etc… This is hard to even think about. In one case, a Dynamic Systems customer discovered they were replacing at least 10% of tools purchased over the course of a project which included more than 1,000 replacement tape measures. Using Checkmate job costing software they saved $20,000 a month in tool replacement costs alone. All made possible by reporting.

3. Ability to track job progress

Every project manager knows that they must manage 3 things consecutively: time, resources and talent. When time is of the essence then progress reports become essential decision making tools. Imagine knowing exactly how close you are to reaching the projects next established milestone.

4. Accurate estimates and effective project accounting

Real time data and reporting has allowed some companies to start managing their budget weekly rather than per project. Thus every week, a new budget can be allocated and based on adjusted real time data. By coming in under budget week after week, additional funds are available for emergencies such as theft, overtime or material shortages.

5. Improved materials management

Many contractors are able to consistently outbid the competition through maintaining an accurate scrap inventory. By allocating material to a job and tracking material used, contractors measure the material used against the budget and inventory any salvaged scrap. Eventually, the company is able to minimize material allocated which reduces the cost of the bid as well as the scrap. Warehoused scrap material can then be reallocated toward new project bids and the saving was passed on to the customer.

Case Study: Construction Co. Saves $20k

image credit: jphilipg