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Construction Reporting that will Make You More Money
Fake news creates an air of uncertainty in determining which stories are legitimate. False context and unreliable sources form the basis of fake news. This is exactly why many individuals place great value on quantitative data. Reports and dashboards based on actual numbers and values provide little gray area. In any business, executives closely follow reports to determine the financial health of a company. Similarly, construction reporting provides valuable data on financial health of the company as well as general project progress and profitability.
Project managers serve as the CEO of their project with a direct pulse on each project’s profitability. Project-level reports allow the project manager to track the different variables that may affect their project’s financials. A few project-level construction reports that project managers should review regularly include:
Change orders represent a proposal of work outside the scope of the original contract. These serve as vital documents that can increase or decrease your project profitability. Contractors must be diligent in moving forward on any changes only upon receipt of a signed change orders. Construction reporting that allow project managers to track the status and amounts of their change orders is critical. Any projects with change orders that have not been approved in a timely manner run the risk of running into schedule delays. When your team performs the change order work in order to meet deadlines, but does not receive the appropriate signed approvals, you run the risk of not receiving payment and exhausting budgeted labor hours. Approved change orders should always be included in any project financial summaries and cost-to-complete reports to view the financial scope and impact of the change orders in a project.
Labor Productivity Reports
Labor is the most significant cost on a project. So a project manager must closely track labor productivity to ensure the project stays within budget and schedule. Such valuable construction reports include ones that allow project managers that track the amount of labor hours actually used against labor hours planned in various ways such as by:
- — Labor hours by labor activity (cost code)
- — Labor hours by labor class (apprentice, foreman, superintendent)
- — Labor hours by work type (base contract, change order, service)
- — Labor hours by time (week, month)
On the flip side of tracking labor productivity, project managers must also track a project’s lost hours. For many subcontractors, lost hours due to delays and disruptions are out of their control such as waiting on other trades or permit delays. Tracking those lost hours and the reasons for those delays enable the contractor to recover payment. At the very least, if delays and disruptions are due to poor scheduling by General Contractor, this potentially releases the subcontractor from fines of liquidated damages.
Cost-to-complete reports serve as a report card on how the project is progressing relative to the original estimate. It captures all the actual project costs including labor, material, equipment, subcontractor, overhead, and other job costs to date. Tracking the cost-to-complete on a regular basis allows project managers to view variances from the estimate and how they affect profit margins.
Labor efficiency reports
As we have mentioned previously in this article, labor is the item that can make or break a project. Therefore, it is important for project managers to review cost-to-complete reports in relation to labor efficiency reports. Capturing labor information in detail allows project managers to accurately hone in on the efficiency of their labor. Additionally, labor efficiency reports forecast the number of projected hours needed to complete the project. Proactive project managers regularly track labor efficiency to analyze labor productivity and determine which activities or crews are taking longer than estimated and make any adjustments as needed.
Company-level construction reporting
Project-level construction reporting get in the weeds of a project tracking financials, documents, and activities. On the other hand, company level reports are high-in-the-sky construction reports. They provide high-level overviews of an individual project or a consolidated view of all financials and activities of all projects. When an executive team member wants to get an update of how the company is progressing, they can log into their project management software and easily pull these reports. No longer do they need to bother their busy project managers to update information or create a project status update. Project management software helps to keep everyone on the same page with the most accurate information.
When people think of reports and money, it is easy to assume that reports should be pulled from your accounting system. However, financial reports from accounting systems usually do not provide the project reports that are important for tracking project profitability. Project management systems capture information in real time to track project financials and progress. The two systems work in concert together sharing information seamlessly.
The right tools can be a big help
Subcontractors are turning to construction management software to simplify document management, improve change order process, and upgrade the collaboration between the field and office—thereby improving productivity and saving costs.
eSUB’s cloud-based project management solution was designed specifically for construction subcontractors, giving them a real-time view and account of their documents and processes, and enabling them to manage it all within an easy-to-use platform. Our mobile app allows you to gather information, fill out a report, digitally sign it, and immediately share it right from the field to improve change order process.
If you would like to improve your construction reporting and maximize the benefits of an innovative construction management software, schedule a demo to learn how eSUB can help.