Job costing and project management software

by brittney_cutler_2 | October 22, 2021 5:00 pm

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By Rachael Pritz

Effective control of the costs associatedpool  with building pools is key to ensuring construction profitability. As industry professionals find themselves over-booked with pool construction or complete backyard renovations the past two summers, it has become imperative hidden costs do not negatively impact the profitability of these projects. With many variables contributing to project cost, the need for an integrated construction job costing software system has never been greater.

Having job costing software with flexible job structures and work stage breakdowns allows pool professionals to better manage project information. To ensure construction profitability, construction job software needs to fully integrate all project costing and progress management with the business inventory, time clock, scheduling, proposals, contracts, purchase orders, receiving, and accounting.

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Job estimating

As professionals know, the first step to a successful construction project is the ability to provide an accurate estimate. Construction job software provides a project estimating system allowing pool builders to enter customized template questions specific to their business, so salespeople do not miss any job specifications or questions necessary for creating a quote or estimate. The job estimating system not only allows one to calculate the job’s selling price but also allows one to add inventory, parts, labour, and subcontractor expenses.

Job contracts

Job costing software should also include a contractor option enabling builders to instantly create a professional contract for aspects of a project that can be provided easily to the client. Most importantly, the job contract becomes the primary document allowing one to automatically set up and manage the project’s progress and track its costs.

Further, construction job software allows one to add ‘hidden items’ to the contract that will not appear on the customer’s sales order—for things like special order items used for creating purchase orders. Though hidden from the client, these special orders can be tracked as they are completely integrated with the business management software the builder is using.

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Job costing-actual

Determining the actual costs associated with the construction project is critical to the success of any job. Using construction job costing and management programs allows one to easily calculate the actual cost of each job and compare it to the estimate. For example, a builder can pull each job from a ‘Sales Order/Contract’ and enter the insurance, tax, and fringe (ITF) rate and select whether inventory, labour, expenses, and subcontractors are taxable or non-taxable.

Additionally, construction job costing software allows a prepaid tax option to be selected to denote if the usage tax was already paid on individual items. The software will also make it easy to add merchandise to an order by either selecting from the company’s inventory or by adding a special-order part to the project. This software even allows one to select the warehouse holding the item and choose the stage of the job where the items will be used.

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By having an integrated construction job costing software system, users can point and click to create picking tickets for the merchandise and supplies to be taken to the jobsite and to deduct them from inventory within the business management software. Additionally, one can enter the expenses and subcontractors as they are used and send the invoices to accounts payable. Being able to track the labour and the associated expenses for each stage of the job is also critical to the success of any construction project—not to mention being able to track the usage tax per job and per month or within a given period. All this functionality will ensure builders are maximizing the profits on every job.

Managing variances

Construction job costing software enables builders to track ongoing project costs and the physical progress of the job. The software needs to allow managers to view the bid price side-by-side with the actual costs so they can manage any variances and perform progress billings. This makes it easier for builders to control variances by showing a clear comparison between the bid and the actual costs.

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To keep tight control of job costing, it is important builders can customize fields in the software to enable construction managers to maintain the profitability of each project stage and each line item. Additionally, it is important to be able to track sub-contractor costs along with one’s own labour, inventory, and expenses on any given number of projects. Construction costs will always vary throughout the process, the goal is to manage those variances to ensure against lost profits.

Incorporating construction job costing software that allows one to follow the actual expenses versus the budget is key to a robust software management system. Depending on the software a builder is using, they should be sure it allows them to view the estimated costs remaining, forecasts at completion, cost variances, and other key job markers such as:

• cost at completion;

• gross margin;

• margin per cent;

• percentage complete;

• earned revenue;

• cost to date;

• margin recognized;

• total deposits and amount billed;

• total amount received for the job to date;

• current accounts receivable balance; and

• remaining balance to be billed.

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Job progress management

Managing the progress of construction projects during an extremely busy summer can be extremely challenging and, for some builders, the use of job-costing software can be crucial. When selecting a job costing software, builders should choose a system that allows them to customize the program for the physical steps of the specific types of construction and renovation jobs the company performs. Other key features builders should look for in the software they employ include project management tools to manage job progress with respect to employees, subcontractors, and third-party services, such as electrical inspectors. Some software even allows one to make ‘change orders’ in the system by attaching a change order to the original job or a change to the job cost.

Having an integrated construction job costing system allows one to manage projects with progress management tools working together with the business software’s scheduling system to schedule appointments and other daily job activities quickly and easily. Progress management tools allow one to tack-on items such as permit numbers and other important notes and information necessary for the job. Further, some construction software systems give builders the option to set up customized job stages and track all costs including inventory, labour, expenses, and prepaid usage taxes for each stage of a job in the construction module. Some software goes even further and allows builders to set dependencies in the system to ensure stages of the job are never scheduled out of sequence to avoid things like having an electrical inspector arrive on-site before the electrical work is signed off as completed.

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Progress reporting and billing are features that should also be included in the choice of one’s construction job costing software. Managers need to be able to instantly print progress reports of all projects that have an open or completed status to ensure against errors and oversights. It is imperative to have the ability to print reports for one or all jobs or for a particular stage for all jobs. This feature allows builders to keep informed as to what the physical status of all jobs are and have a record of who, what, where, and when.

Busy summer seasons make construction software even more valuable by ensuring progress billing is completed in a timely fashion for optimal cash flow. When looking at construction job costing software, builders should be sure the system can also perform progress billings from within the construction module to ensure accurate billings. For example, the software should be able to calculate progress billing payments based on the project’s state of completion and then be able to send the totals directly to the accounts receivable department so they can bill the clients.

Lastly, one should not forget about new mobile technology options that allow in-field personnel to take payments on the jobsite. By using a mobile device, the project team can accept payments which will immediately be listed in the payment screen. This allows payments to be made on the main job but only up to the amount of the main job minus any outstanding costs and previous billings.

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With so many variables contributing to job cost, the need for an integrated construction job costing software system has never been greater. Now is the time for builders to research and invest in this type of software solution so their company can effectively control the costs associated with pool construction and ensure maximum profitability on each project. Construction job costing software is becoming a ‘must-have’ tool for many builders as the number of homeowners investing in their backyards by having a pool installed has increased dramatically over the past two years. This trend is only expected to continue as many builders already have a full slate of projects to complete heading into the 2023 season.

Rachael Pritz is executive director of RB Retail & Service Solutions. She has been active in the pool industry for more than 20 years, which has provided her with an all-encompassing expertise in the trade. Pritz worked at a local pool store while pursuing a master’s degree at the University of Pittsburgh, Pa. With her technical skills and industry knowledge, she joined the launch of RB Retail & Service Solutions in Pittsburgh in 2003. She can be reached via email at rachael@rbcontrolsystems.com.

Source URL: https://www.poolspamarketing.com/trade/features/job-costing-and-project-management-software/

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