In business, numbers don’t lie. However, in the remodeling industry, getting accurate numbers on job costs is often a challenge. Companies that use paper reports to process job costs can be relying on week-old numbers to assess project margins. Allen Dickey of 5th Generation Contracting said real-time job costing through a cloud-based computer system can breed better forecasting and efficiency.
“If you don’t know today that you’re over budget, you have no ability to fix it for tomorrow,” Dickey, the Vice President of Construction at Marietta, Ga.-based 5th Generation Contracting, said on the most recent episode of The Tim Faller Show, a podcast dedicated to the production side of remodeling.
Project management software like Buildertrend and CoConstruct allow companies to share project management, financial management, and other management files in a single suite which can be accessed by many devices, including phones and tablets. Such software also allows project managers to access real-time job cost data in the field.
Prior to adopting Buildertrend, Dickey said the project management process for 5th Generation Contracting was “controlled chaos” and projects had “no continuity” because real-time questions could not be answered in a timely manner.
The real-time job costing afforded by shared-access computer software allows everyone involved on a project to focus on the end-goal profit margin. Dickey said if you closely watch your job costs on a daily basis, you stand a far better chance to come out on budget.
Real-time cost data allows accurate forecasting of profitability and frees up project managers to make informed decisions based on whether a project is over or under budget. Project managers can also more easily monitor slippage and grippage on projects.
Dickey acknowledged that while the cloud-based, computer system has benefited 5th Generation Contracting greatly, there is a general resistance to technology among project managers and lead carpenters. Many see the addition of a new software that needs to be learned as a deterrent rather than a benefit. However, Dickey said selling project managers on the big picture benefits of real-time job costing is a key to overcoming resistance.
Dickey said in conversations with project managers, it is important to highlight how investing in real-time costing will positively impact the entire company. By better projecting cash flows, a company can make more timely payments, which breeds greater loyalty with subcontractors and vendors while also bringing about lower costs, Dickey said. By focusing on the big picture, Dickey said, project managers can realize how the spillover effects of real-time costing can positively impact all aspects of a company.
