In our last post, we looked at why trade construction businesses are succeeding at rates previously unimaginable.
Ten years ago, no industry veteran would have guessed that the five-year success rate for construction businesses would be higher than the U.S. average across all sectors. But here we are.
In this post, we’ll take a deeper look at the role digitization has played in stabilizing construction businesses.
Table of Contents
Stronger Project Management
You don’t get paid for work you don’t document. That’s an iron-clad rule among trade contractors.
By digitizing project management, communications and document management, small construction companies have given themselves an entire set of processes that support documentation — i.e., ensuring they get paid.
We built eSUB with this goal in mind. Our construction project management software:
- Gives teams a dashboard for visualizing each construction project’s progress.
- Facilitates better collaboration between office and field teams.
- Standardizes processes.
- Organizes all project data and project documentation in one place so it’s easy for anyone to get access to the insights they need to make more informed decisions.
Better Accounting Visibility
Most construction company owners struggle with a feeling that money’s going out the door, and they have no clue where.
Newer generations of cloud-based accounting tools help with this, specifically because they can integrate with other software to ensure a consistent flow of data. Materials costs and time sheets from other tools plug directly into accounting software to provide a clear view of what money’s going out the door, and where.
The team at public accounting firm Dean Dorton makes a clear case for why construction businesses need these kinds of tools. “Accounting becomes simpler, faster, and more accurate for the in-house financial team, helping them accomplish more work in less time,” they write.
“The quality of their financial insights and planning improves as well, putting a construction company in a much stronger position through smart money management.”
Better Supply Chain Management Tools
In an era of rising materials costs, global inflation and workforce shortages, having more control over the supply chain becomes a major competitive advantage for construction companies.
Case in point: The team at Open ECX, whose software helps companies automate buying, selling and invoicing with supply chain partners, surveyed more than 100 construction financial professionals at the end of 2022. They found that, among the companies that had implemented software like Open ECX’s, the vast majority of businesses reported five-digit savings.
“Businesses want partners that respect and adhere to responsible business practices,” the Open ECX team writes. “Firms want to partner with those offering prompt payment, who will be transparent about their ways of working, open to collaboration and accountability. Technology can facilitate all of this.”
Companies owe their employees safe working environments. Failing to do so can be expensive. Besides regulatory costs such as OSHA fines, the cost of an on-the-job injury that involves medical consultation is about $42,000 on average, according to the National Safety Council.
That’s not a drop in the bucket for most construction companies. Two or three such injuries in a year can be financially catastrophic for a construction business.
Strong communication provides a useful layer of prevention against workplace accidents. As we note in our Ultimate Guide to Construction Site Safety, cloud-based project documentation tools are great for flagging potential hazards (e.g., chemical spills, issues with scaffolding) so that any member of the team can have access to that information.
And in the event of an accident, timely responses are important. Companies like Vatix are providing helpful tools such as apps and alarms for tradespeople working alone. “For workers, beyond the evident impact on personal health and well-being, the impact of an accident can be monumental and even lead to the loss of livelihood of an entire family,” writes Adrián Abad Garcés, product marketing manager at Vatix.
“This is especially true in minority communities, where often the main breadwinner is the injured worker. In addition to the loss of earnings, medical costs can be prohibitive in the United States and can have huge impacts depending on the employee’s medical coverage and severity of injury or illness.”
To see how stronger construction project management and project document management processes can fortify your construction business, schedule a demo today.
Images used under license from Shutterstock.com.