The awareness around adopting software to become more efficient is growing among General Contractors (GCs). In a recent survey report from AGC, 38% of the respondents stated that they will increase their investment in accounting and project management software. Additionally, 36% said that document management software would be their priority for 2024.
There is going to be a significant adoption of general contractor software this year, and anyone not moving in the same direction is likely to be left behind. If you are a general contractor, and are wondering why everyone else has started using software for their work, this is going to be an important read.
To answer this, let’s first take a step back and look at the common pain points GCs face, and the vicious cycle of financial hits that result from them:
1. Poor Field-to-Office Communication: With a stark lack of field visibility, people in the back office have no idea of the project progress, or even if the work done is correct or not. Usually, they wait till the next day for some sort of document to arrive with the field report. This will already be too late if the work done previously was wrong.
2. Outdated Documents or Drawings: Field users are not always working with the latest and most accurate information. If a change in the layout or plan has been decided by the higher ranking management, that update does not reach the field crews on time, leading to wrong work being done. Correcting this will involve expensive rework, and a loss of morale among the company over time.
3. Delayed Projects: These issues of poor communication and lack of updates reaching the field late will naturally cause projects to get delayed. Correcting mistakes would mean that you are working on the same task for an additional few days which also translates to wasted cash.
4. Increase in Capital Spending: These delays would mean that companies have to put in additional money into extra labor and materials, which would drive up the net working capital of projects. As the delays accumulate, this could cause a strain on the finances of companies.
5.Overall Net Negative Cash Flow: As a result of all this, the net spending far outweighs the income, resulting in a negative cash flow for general contractors. Any bids for new projects would have to be shelved until the current ones are completed, which can hamper their growth.
Adopting software can greatly help towards mitigating the pain points stated above. In a nutshell, general contractor software can help reduce errors, improve communication, and ultimately increase their cash flow. Let’s take a look at how a typical software can help out.
Field Data Collection and Reporting
This is the first step towards solving a lot of the problems we discussed. It all starts from better communication between the field and office teams. What software can do is allow field users to fill in daily reports directly from the jobsite using their mobile devices. Any supporting evidence like photos can also be uploaded on this form, complete with annotations and markups. These are then generated as PDF reports and sent to the relevant stakeholders.
How is this helpful? Field users get to finish their daily reports within minutes, and managers receive detailed reports from the field with supporting visuals. This allows for a better knowledge of project progress, and quicker issue handling if required.
Cloud-based Document Management
Documents play a key role in any construction project. From contracts to drawings and field reports, there are many of them going around, and it would be unwise to manage everything manually on spreadheets or even worse, physical papers.
Software can help with this and a lot more. For starters, companies get a single source of truth for all their documents. And since this is cloud-based, it can be accessed from anywhere on any device, provided the credentials check out. Speaking of which, general contractors can also manage access to sensitive documents to limit unauthorized access.
But by far the most important help this feature would give is real-time updates of any changes. The latest information is instantly updated and notified to everyone on the team, making sure that field crews especially, have access to the latest information.
Time Tracking
This is a function that has a huge scope for error, and potentially the most damaging for a company’s finances. Numerous administrative tasks are done manually, and keeping track of time spent on multiple projects across jobsites is both cumbersome and error-prone.
With digital time tracking, field crews can log their time using the mobile app directly from the site. These updates are instant and accurate, and they populate automatically on a single interface. Accounting personnel need to make multiple calls to project managers of different jobsites; all the information is available on a single screen, for all ongoing projects.
With this information, not only are errors eliminated, but the approval cycle is significantly faster which leads to faster invoicing. The quicker you invoice your clients, the quicker you get paid. As this process stacks up across projects, companies will witness an increase in their cash flow.
Dashboard and Analytics
Another way general contractor software can help is by consolidating data across the company into easily digestible dashboards. Managers and accounting staff now get a visual representation of the work going on and time logged, allowing for better analysis and decision making.
The alternative would be to manually go through multiple spreadsheets to glean data. This is time consuming, and the data gathered might not always paint the whole picture required for informed decision making. The use of software ensures that any issues can be tracked and addressed proactively, and better decisions can be made for future projects based on learnings from current ones.
Adopting the best general contractor software for your company provides numerous benefits that ultimately improves its growth rate. With better communication between field and office teams, work is completed faster with less errors, making way for quicker invoicing and revenue cycles.
All this results in an increase in cash flow, which means companies can bid on new projects and constantly improve their performances with the learnings from previous ones.
