10 Ways Your Integrated Software System Can Pay for Itself
Outgrown Spreadsheets at your Construction company?
…but not sure if you’ll get a return on your new software investment? No need to worry! Here are ten great reasons how Sage 100 Contractor or Sage 300 CRE will pay for itself — and WAY beyond that!
1. Eliminating spreadsheets – almost 90% contain errors!
Wall Street Journal did an article a few years back stating that 87% of spreadsheets contain errors; and Ray Panko, the professor of IT management at the University of Hawaii and an authority on bad spreadsheet practices, reported the number at 88% in his study. “In large spreadsheets with thousands of formulas, there will be dozens of undetected errors,” Panko asserted.
2. Identifying which parts of each job are profitable and which ones aren’t
If you manage jobs by just looking at the overall billing versus cost, you are probably leaving money on the table. The best estimating systems are based on prior job histories. If you don’t know your costs and profitability by item, how can you use them to estimate?
3. Implementing an Integrated Purchasing system
Have you ever paid the same bill twice? Have you paid more for an item than you contracted to pay? Only the estimator deals with the job at the lowest level. Since most purchasing is not done by the estimator, items are missed or ordered wrong, resulting in employees running to the supplier to pick up the items that were missed. This means money wasted on unnecessary labor, higher prices, and more confusion on the job site.
4. Capturing all change orders, knowing their cost, and billing for them
Change orders typically represent between 1 and 5 % of total construction costs on a job. Each change to scope also affects the productivity for the other aspects of the job. QuickBooks lumps all of the change orders together in one total amount. If you aren’t getting a signed Change Order approval for each change, you are not billing for your additional costs.
5. Capturing all costs for a job so that when billing Cost Plus or Time and Materials you are not missing items
T&M and Cost plus is great if you know what it is. One of our clients said, “We were giving away tens, if not hundreds of thousands of dollars every year because of not tracking time and materials right. That in itself paid for all of the software and all of the computer upgrades that we had to do to get MasterBuilder up and running just in the first six months.”
6. Avoiding Costly Equipment Repairs by being alerted when service is due
Equipment Maintenance is a necessity, not a luxury. Missing fluid changes, scheduled overhauls, and filter changes not only shorten the life of your equipment but increase the costs of your projects. How much did you spend on equipment repair in the last year? Would some of that have been prevented if your mechanic had been alerted to everything that needed to be serviced and when?
7. Allocating Workers Compensation based on the higher classifications only for the time they work under those classifications
The difference between paying an employee’s workers compensation at the highest rate they work under and paying that rate only for the time they actually perform that work will result in significant savings on the insurance premiums you pay.
8. Eliminating time spent tracking information outside of your system in spreadsheets and reentering information between separate systems
The probability of a data entry error ranges from 2 % to 27 % based on the person performing the data entry. Each hour spent re-entering information into another system or worksheet is an hour wasted. Time is money and there are only so many hours in the day.
9. Joint Check Generation and Lien Release Generation to protect you against claims from Subcontractors failing to pay a supplier
Just one claim from a supplier that they haven’t been paid may be enough to pay for your purchase of an integrated software system. Everyone knows that in a claims situation whoever has the most paperwork wins. Easily generate RFIs, Change Orders, Daily Log Reports, Lien Releases, Joint Checks and more without the extra effort.
10. Eliminate paying an Accountant to review and compile your financial statements monthly or quarterly
Looking at your financials on a quarterly basis is like looking in your rear-view mirror one mile after you passed your destination. Jobs may have started and finished in the time frame you are waiting to find out if your company is profitable. You might be out of business and not even know it.