The job cost module is the core component of construction software solutions and has overall responsibility for tracking expenses vs. revenue as they pertain to a job’s budget and its profitability. The job cost ledger is fed by sub ledgers such as accounts payable, payroll, inventory, and equipment which send it data for all financial information related to a project including labor, materials and overhead costs. Job cost software should offer a variety of reports and inquiries that provide overview information including initial and revised budgets by phase, actual costs to date, committed costs, expected costs to complete the project, billings to date, and cash collected to date, etc. In construction time is money. The sooner you know about problems, the sooner you can deal with them so most contractors are looking for “real time costs” postings from sub ledgers. Legacy software may require separate postings to update job ledgers (as opposed to real-time posting). There are various ways jobs are priced including: fixed price, time and materials, and cost plus. Contractor management is all about how you track costs to insure you reach your profit margin goal. Each phase of the job, along with scheduling milestones and comparing forecasted percentage of completion compared to actual with associated costs should be tracked continuously. In order to capture the necessary details it is important for the office and field to be synchronized for capturing labor, material and supply costs along with any anticipated scope changes to the job. Modern management understands that there must be an efficient way of collecting and transmitting job data from the field offices to the home office at the right level of detail and at the right time. For example, it is no longer acceptable to wait for payroll to be run before knowing work in progress labor costs on the job. This is necessary for purposes of progress billing as well as simply tracking current labor costs to see if the job is on plan. Nowadays, software vendors must offer an efficient way to capture time and materials from the field and transmit it using a variety of devices. Thoroughly detailed job cost data is also important for estimating and bidding future jobs including both direct costs and appropriate overheads. Contract / Not to Exceed Jobs A key component in modern day construction is timely, accurate communication with the customer. This can involve any or all of the following: budgets, phases, work-in-progress reporting, progress billings, change orders, tool/equipment tracking, vendor billings, material deliveries and other job criteria. We all understand that managers and customers hate surprises for costs or schedule slippages. Any contractor who lacks reliable, real-time work-in-progress information isn’t going to keep customers happy and stay in business very long. Cost overruns can occur at any time and will wind up costing the contractor, and not the customer, most of the time. Here are a few examples: Actual labor hours exceed the estimate. Materials delivery at the job site is delayed. Materials are missing, or Orders slip through the cracks. Material prices are billed higher than the original quote. Tools are missing or lost at the job site. Change orders slip through the cracks and not approved or billed. This is just a small sample of what can happen while the job is in progress. Once the contract job is completed, the contractor needs to take an honest look at the final numbers to see how well or how poorly he did. The Price of Information "Silos" More often than not when we speak to contractors looking for a new software solution, spreadsheets, many of them, are mentioned in the conversation. This is because the company started out using an inexpensive small business accounting package (usually QuickBooks) and circumvented its limitations by building special purpose spreadsheets for tracking job costs, changes, inventories and more. The result is duplicate entry of information, often inaccurate and late information gathering. The most common “catch phrase” used by prospective software buyers is “need for an integrated solution.” Integrated Design Saves Time A single entry, integrated program gives the contractor a leg up over his competitors. As employees enter in their information, the data flows naturally throughout the program, hitting all the required destination points. With an integrated program, the job cost information is more timely and accurate. A simple example is when change orders are approved, the job budget is automatically adjusted. Another example typical of contractors is committed purchases (which are deducted from overall remaining purchase authority). Dashboards Another feature we find contractors asking about is executive dashboards. These are those fun onscreen reports which hit the highlights of KPIs (key performance indicators) and show management key data in such critical areas as: cash over and under billed for jobs, outstanding change order submittals, scheduling delays, cost to complete vs. remaining budget, scheduled actual vs. estimates for labor and materials, and the like. Field Data Collection Recording Labor and Material items at The Job Site Accurate and timely recording of labor and or materials at the job site is an age old problem. Workers are good at doing construction, but not necessarily good at paperwork. With today’s technology you can capture time in the field with a PC, tablet or smartphone by person and job. You can also conveniently capture materials used for a job. The data should be transmitted to the central office for batch processing later in the day. Costing and Pricing the T&M Job Office people also like working with Field Sheets because they can cost and price each material item faster. Field Sheets eliminate the age old problem of having to read a workers handwriting – or trying to interpret the different descriptions workers use for the same item. The costs and prices must be accurate and up to date for this step to be successful. Progress Billing General Contractors must progress jobs that are ongoing for any period of time. The progress bill may require a specific customer format so the software must allow for a custom design. Furthermore, it often happens that a progress bill will need adjusting in which case the initial progress bill must be voided and a new one prepared. Some software will allow for simple reversal or adjustment, others will require a total deletion of the initial progress bill and starting over with a new document. Project Management, User Acceptance Senior Project Managers can sometimes be a major roadblock to adapting to new technology. It is essential that procedures be adapted to the capabilities of software and all staff be properly trained and motivated in following these procedures. Project managers and, therefore, project management software is critical to running a successful, profitable operation for a contractor of any reasonable size . Summary Job Cost is the central information hub for a construction company. Virtually every transaction for a contractor eventually touches the job cost ledger. Therefore it behooves a prospective buyer of contractor software to focus on all the data and integration points that are posted and tracked in that ledger to understand exactly what you are buying.