I have completed approximately 15 reviews for the 2014 Best Construction Blog competition. There are about 20 more entries in the queue, and more are arriving as the nomination deadline approaches on January 31.This means, to avoid an unfair situation where reviews are completed without adequate voting time (or near the voting conclusion on March 31), I’ll need to focus most daily blog entries for the next couple of weeks on the reviews.
Ledgerwood Associates’ Ltd.‘s The Ledger blog, operating under the URL timeberlineforum.com, shows how a software consultant/distributor can make effective use of the blog to provide information, promote services, and encourage thought.
There’s a mixture of seriousness and whimsy, some basic advice, and practical insights in this blog, updated weekly. Joanie Hollabaugh observed in the nomination form:
Ledgerwood Associates’ blog “The Ledger” helps clients with their Sage 100 Contractor or Sage 300 Construction and Real Estate software solutions weekly, through their blog posts.
Filled with tips, training, and occasional anecdotes, the blog posts are categorized via a keyword list to search for specific topics like “document management” or “estimating databases.”
I observed this posting: 10 Ways Your Integrated Software System Can Pay for Itself, which explained the value of integrated software quite effectively. Obviously Ledgerwood has an interest in promoting integrated software, but note the suggestions here are not brand-specific, and could apply just as well to competing products/services.
- Eliminating spreadsheets – almost 90 per cent contain errors: Wall Street Journal did an article a few years back stating that 87 per cent 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 8 per cent in his study. “In large spreadsheets with thousands of formulas, there will be dozens of undetected errors,” Panko asserted.
- 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 what your costs and profitability by item, how can you use them to estimate?
- 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.
- Capturing all change orders, knowing their cost, and billing for them: Change order typically represent between 1 and 5 per cent 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.
- 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.”
- 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?
- Allocating workers compensation based on the higher classifications only for the time they work under those classification: 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.
- 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 per cent to 27 per cent 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.
- 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.
- Eliminate paying an accountant to review and compile your financial statements monthly or quarter: Looking at your financials on a quarterly basis is like looking in your rearview mirror 1 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.
I can see how, looking through that list, you would be crazy not to consider implementing an integrated software solution for your business; the next test is to determine the best solution.