Horizons Spring/Summer 2019

for whom the work is performed drive the amount of revenue earned on a contract. Networking, reputation and key contacts within a market lead to additional work. For contractors willing to invest in technology, a reputational competitive advantage may be obtained within the marketplace that often times will lead to better and more frequent opportunities. However, once a company obtains a signed contract/change order, the key to success (assuming an appropriate initial bid) is a company’s ability to manage its costs appropriately through good execution, as the revenues are essentially fixed based on the terms of the contract. Costs on construction jobs can essentially be broken into four categories: Technology advancements can assist with staff time, material/equipment/subcractors and overhead, but the biggest area of focus with the use of technology should be in avoiding preventable mistakes. Preventable mistakes can consist of building things to the wrong specifications requiring re-work and leading to additional staff time, material/equipment costs, overhead costs and also liquidated damages on a job. Not to mention, a hit to a company’s reputation for not getting work done on time. Other preventable mistakes consist of employee injuries that result in workers’ compensation claims and a hit to a company’s safety record, which can affect a company’s ability to bid and obtain future work. Preventable mistakes pose the biggest threat to a contractor’s bottom line. When a particular job becomes unprofitable, ∙ Staff time ∙ Material/equipment/subcontractor ∙ Overhead ∙ Expenses incurred due to preventable mistakes

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preventable mistakes are often the reason for the poor performance. Many construction companies have experienced record years and tremendous growth since the recession years ago. However, some construction owners have a healthy fear of tumultuous times ahead, as it is not forgotten what a downturn in the economy can do to a business. The following are some cost saving and efficiency ideas and other ways a reasonable technology spend can be used to help companies. Accounting Software & Data Analytics Accounting software for contractors continues to improve by providing greater access to underlying data and providing more user-friendly reports. Management teams are able to analyze the performance of jobs/business in a much more timely and efficient manner than ever before. Data analytics are expected to advance towards real time information as accounting software continues to improve. Job Site Layout Job site layout can have a significant impact on labor productivity. Things as simple as placement of the master toolbox, workstations and restrooms can have a significant impact on labor costs over the course of time. Try to place these items in a relatively close, central location where employees do not have to walk significant distances each time they venture from their work area for the day. This could reduce down time and result in jobs being completed more timely.

Spring/Summer 2019

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