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February 07, 2017

Placing a Priority on Job Costing

As the saying goes, knowledge is power. Whether you’re the CEO of a construction company or a project manager, the inflow of information has a significant impact on the business’ ability to win new work and keep existing clients happy. Some of the most important data that construction companies need access to lies in job costing, where having the right information can impact everything from building historical cost data to preventing potential overruns.
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That’s why construction software that enables more streamlined job costing is so important for companies looking to grow their portfolio and take on larger projects. However, some construction management firms and general contractors continue to rely on manual methods of tracking job cost data, which is oftentimes more prone to errors and also reduces the speed with which teams can assess project performance and access cost histories.

But the challenges associated with manual job costing go deeper than simply being more cumbersome and time consuming: poor record keeping can also lead to improper job costing cut-offs and inaccurate estimated job costs. And unfortunately, those construction firms that win more work tend to see the ramifications of such record keeping revealed in the form of more hands on deck needed to keep track of data entry on Excel spreadsheets, sending overhead costs soaring.

Automated job costing software is one investment that ultimately helps control costs and makes profit margins even greater.

More than Just Numbers

Job cost data also exposes a key reason why traditional accounting software isn’t the best bet for construction companies. While your job costing activities may fall under the purview of the accounting department, most standard-issue software doesn’t weigh the specific data sets that help keep projects on-track and profitable. For instance, the right job costing software can enable project teams to self-define cost codes for quick access to the original budget, a modified budget with change orders, and current cash flow. Those are details not always found with off-the-shelf accounting solutions.

Given that construction projects aren’t completed in a day, cost forecasting is another must-have attribute of job costing software. It’s not enough to just look at the money that’s been spent; project teams also have to manage budgets against money they intend to spend. Other facets of construction project management software not always found in accounting solutions include the ability to manage change orders. With the right tools, project managers can automatically update every team member the moment a change order is approved, facilitating better communication and ensuring the right stakeholders see the change in scope along with the projected impact on cost and budget.

Even the day-to-day tasks associated with a construction project are easily captured with the right job costing software. Remote time entry, labor costs and workers comp can all be easily tracked with automated construction management technology. It’s never been easier to see the totality of a project from one screen with one click.

Software Made for Construction Professionals

With all of these potential features to tap into, it’s important to remember that the right project management software should ultimately help project teams do one thing: win more work. That’s why job costing is so important, as it dictates future performance by utilizing existing data as intelligently as possible. That can be difficult to do with spreadsheets, not to mention time-consuming and error-prone.

Software solutions like Sage 100 Contractor and Sage 300 Construction and Real Estate have proven track records of helping project teams exploit the data available to them to prepare better bids, and then seamlessly manage the project through completion via a user-friendly dashboard built for the construction industry.

To find out how Sage’s construction project management software solutions can make job costing a streamlined, data-rich process, contact the team at United Solutions today to set up a demo.

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