Why Technology Matters for Construction Job Costing

Construction job costing helps contractors track their spending to keep their projects within budget and maximize their profits.

Traditional manual methods of tracking costs can be prone to errors, leading to project delays and unnecessary construction cost overruns. According to FMI Corporation, a consulting and investment banking service firm, 50% of contractors reportedly believe 11% to 15% of field labor costs are wasted or unproductive.

To avoid these potential setbacks, many construction contractors are turning to construction accounting software to help improve the accuracy of their job costing.

Construction accounting software offers a range of features, like real-time reporting, that can make job costing more accurate with minimal manual effort.

Key Takeaways About Construction Job Costing

• Construction accounting software helps contractors track and manage costs more accurately by offering real-time data collection.
• Automated reports can be generated quickly, allowing contractors and stakeholders to drill down into specific cost categories, allowing them to identify potential issues earlier.
• By analyzing historical project data, contractors can forecast costs more accurately and optimize resource allocation, leading to more efficient budgeting and increased profits.
• Cloud-based construction accounting software — like FOUNDATION® — provides contractors and project stakeholders with a centralized location to access real-time data to make more informed decisions.

Real-Time Data Collection and Cost Tracking

One of the most significant ways technology enhances job costing accuracy is through tracking data. Gone are the days of relying on paper logs or outdated spreadsheets.

With construction accounting software, contractors can input and track expenses, labor costs, material costs and other relevant project-specific data quickly.

Construction accounting software allows team members to update job cost information instantly. Whether a crew member is entering hours worked or a supplier updates material costs, these changes are immediately reflected across the entire system, giving contractors a more comprehensive financial view and helping them more effectively manage their cash flow.

Automated Reporting and Drill-Down Capabilities

Construction accounting software also makes generating reports faster and more efficient. Instead of manually compiling data from various sources, contractors can use software to generate reports at the push of a button.

These reports can provide high-level overviews of the entire project or allow for detailed drilldowns into specific cost categories.

For instance, a contractor might want to review labor costs for the project. They can use construction accounting software to generate a report that shows overall labor costs for the project as well as drill down into specific trades or workers to identify potential areas of overrun.

Drilling down into specific aspects of job costing empowers contractors with the information to identify issues early on and take corrective action before costs spiral out of control.

Additionally, automated reports save time and reduce the likelihood of human error. These reports can be generated and shared with project stakeholders instantly, fostering improved communication regarding the financial health of the project.

Improved Collaboration and Transparency

Accurate job costing requires input from a variety of stakeholders, including:

• Project managers
• Accountants
• Suppliers
• Subcontractors

Technology enhances collaboration by allowing all parties to access the same information in real time, reducing the possibility of miscommunication.

Cloud-based construction accounting software facilitates this collaboration by providing a centralized platform where all stakeholders can update and review project costs.

This transparency helps ensure that all team members are aligned on the financial status of the project because everyone has access to the same data.

Better Resource Allocation and Project Forecasting

Technology doesn’t just help track job costs — it can also provide valuable insights that aid in resource allocation and forecasting for future projects.

By analyzing historical data from past projects, contractors can identify trends and patterns to help predict future costs, helping contractors create more accurate budgets for upcoming projects.

For example, if historical data reveals that material costs tend to fluctuate based on seasonal demand, contractors can adjust their budget forecasts accordingly.

Ultimately, this means contractors are maximizing their productivity, reducing unnecessary costs and increasing profits.

Enhance Your Construction Job Costing With FOUNDATION

As construction accounting software — like FOUNDATION — continue to evolve, its positive impact on construction job costing for construction contractors becomes increasingly clear thanks to real-time data and automated reporting.

Contractors can leverage this data to improve their forecasting and make better budgeting decisions — ultimately leading to more successful projects.

For more information about FOUNDATION’s job costing capabilities, talk to a specialist today.