Thankfully at present raw material cost inflation is sluggish – we have low oil prices to thank for that – but improving efficiency within your business should always be one of your main priorities. It’s never easy to find new ways to increase productivity in a construction company, but the task can be made somewhat easier if you have plenty of data to examine in your accounting software’s database. These four different approaches to improving resource and subcontractor management can help your business increase profits in the short and long term.
#1 Automate and streamline time-consuming processes
As labour costs continue to grow, it’s only logical that you should optimise the way your staff and subcontractors spend their time. While we can’t yet automate on-site tasks like bricklaying and painting, there are many administrative processes that you can leave to your software. When working with a new subcontractor, use your construction software to automatically verify their CIS status. Now that auto-enrolment pension schemes are a requirement for many firms, use your software to automatically calculate eligibility and contributions instead of reaching for a calculator or poring over an Excel spreadsheet. If there’s a particular admin task that you want to streamline, chances are your software will be able to help.
#2 Use job costing software to predict and prevent costly jobs
Good job costing software lets you drill down to every individual unit cost within categories and subcategories of each job, allowing you to compare the actual cost of the job with its original budget. These figures aren’t just for accounting purposes – use them to plan your business strategy, too. If there’s a particular type of job that’s caused problems for your company, consider avoiding similar jobs in the future. Conversely, if a potential job is comparable with past successful jobs, you should feel more confident about taking it on. This approach reduces the risk of each job and enables you to allocate resources to projects that are more likely to bear fruit.
#3 Information in the cloud
Sometimes a specific task will take hours or days longer than planned because a communication failure meant that staff or resources were in the wrong place at the wrong time – and they might have even failed to complete the task in the manner that the end client was after. If your accounting software has cloud functionality, use it to store documents for subcontractors and site managers to access while on-site. Even if you don’t use this type of software, consider using a calendar or planning application to visualise where assigned staff need to be at certain times and dates.
#4 Cost value reconciliation
Unless your construction company carries out only the simplest of jobs, there’s always something to be gained from cost value reconciliation (CVR). CVR software carries out the process almost instantly, providing you with a near real-time look at the financial position of each job. By keeping a close eye on payments received and project costs, relative to predicted levels, you can identify where a job is going over budget and take steps to rein in costs before they escalate to a damaging level. Use this information to move resources and staff to where they are needed to prevent further excessive costs.
While the power and capability of today’s software is certainly impressive, the data your accounting construction software generates is useless unless you make active use of it. For advice on how to turn data into actionable information, contact your account manager or browse through previous articles on the Integrity Software blog.