How to cope with rising raw material costs in construction

As the construction industry continues to see a boost in demand, the rising cost of raw materials has gone some way to temper enthusiasm and dull optimism. As a construction industry contractor, your firm will constantly seek new ways to complete projects to budget – but this can prove tricky as costs continue to rise. Saving money in other areas will free up cashflow and provide a buffer to allow for the inevitable fluctuation in material costs. Accounting software for construction companies can provide the solution, saving money across several areas.

Speed up back-office administration to cover skills shortages
Human resources are scarce for construction companies, as skilled workers are currently in high demand. Automating regular day-to-day administrative processes will have a knock-on effect across your company, as staff can spend more time on core tasks.

Management of purchase orders, contracts and project costs can be carried out with ease when using accounting software for construction, while simple reporting can be delivered with the click of a button. Documents can be stored electronically, available for instant access whenever they are required – without the need to print or store paper copies. This both saves time on administrative processes and improves data security by preventing unnecessary printing. Freeing staff from the burden of administrative processes will allow them to focus on more essential, skilled tasks.

Improve financial processes for better budget management
Automating financial processes wherever possible can help to free up existing staff, ensuring they can focus on core day-to-day tasks and improve efficiency. Areas such as payroll can be assisted with automated invoice submission and online filing with HMRC, while credit control can be handled in less time, as account reconciliation modules enable staff to identify key creditors and debtors. Reminders, client invoices and remittance documents can also be sent out on automatic timetables, helping to save time and ensure all payments are made to schedule to improve project cashflow.

Introduce better subcontractor management processes
Subcontractors are an essential part of any construction project, but it can be hard to make sure that they are delivering to budget and on time – particularly in large companies handling multiple contracts simultaneously. Improve subcontractor management with online filing options direct to HMRC, ensuring full compliance and reducing payment delays while keeping an eye on project progress with simple reporting tools. Analysing invoices and cross-referencing these with project progress is a good way of ensuring projects remain within budgets, even despite rising raw material expenses.

Enforce purchase order rules
Manage purchase orders by setting rules such as purchase order limits. This will help to tighten budget control, as project managers are able to receive alerts when contracts appear to be going over budget. Creating project-specific purchase order limits will enable construction companies to define raw materials expenses on a per-project basis, gaining full control over supply requests and preventing unnecessary orders.

Find out more
There are many more ways in which accounting software for construction can help companies save money in order to free up budgets and cover the rising cost of raw materials. For a demonstration and to find out more, contact Integrity Software today.