6 tips to have better control of your construction projects financials

Does your construction company suffer from project cost overruns? Read 6 tips that helped your colleagues that are using construction cost management software "Bauwise" to better control their projects financials & track construction projects budget.

1. Control budget in a real-time - track actuals vs planned budget

Construction companies are suffering from over budget projects. It is not only a “pain”, but it can also sometimes be a serious “illness with a fatal outcome”. How to avoid it? There are many components, but one major is to control your planned construction project budget vs actuals in a real-time, daily. Keeping your hand on “project pulse” will help to avoid significant budget deviation and let you take the right decision on time. “Bauwise” users can control planned construction project budget vs actuals in a real-time - they can see expenses data automatically gathered from the accounting system straight on the budget lines and compare them vs planned budget. Also, they can visually observe negative budget numbers and monitor essential project financial indicators.

2. Predict feature - forecast your additional expenses daily

If you want to keep your project “health” good, it’s important to monitor it regularly. But if you want to anticipate problems in the future - it’s critical to “catch bad symptoms” in the earliest possible stage and take timely actions. It means you should be able daily forecast budget deviations or additional expenses, such as the rising cost of raw materials, reworks, overspending or scope changes. Knowing it in advance you will be able to take timely actions, e.g. minimize the negative result to your project bottom line. “Bauwise” users can do a daily forecast on every budget line with a single click and immediately see how does this influence project result. They are predicting project end result and work smart to improve the project bottom line.

3. Control subcontractors - manage subcontractors contracts, track bills

It is industry demand to hire subcontractors. The construction business is extremely dynamic and it is challenging to fill in all projects capacity with your own resources or in another hand always supply uninterrupted 100% employment for your big stuff. Subcontracting is growing - so more subcontractors, more contracts you need to manage & control, more invoices you get and need to track them. “Bauwise” users can easily track & manage how much exactly works/budget they have contracted and how much still left. A project team is always aware of the agreed contract price, subcontractor invoices, remaining amounts to pay and they never overpay.

4. Plan your money with confidence - precisely forecast your cash flow

Do you exactly know how much money you will need to spend next month? Or how much incomes you will get? Sure you know, because this is like an “air” for your organization and the projects you run. But how much time it takes for your team to generate a cash flow report? How precise is it? Would you be more confident if you would know your cash flow far in advance? “Bauwise” users can use a simple cash flow report with a colorful chart to see month by month cash flow plan until the end of the project. A report is taking data from project income & costs forecast and compared to the actuals from the accounting system. Cash flow report takes into account payment terms and besides, “Bauwise” users can use Gantt chart functionality for more precise cash flow planning, so they can trust numbers and plan their money with confidence.

5. Automate paperwork - allocate and approve expenses online

Allocating costs on the right project/budget line is a crucial task, that enables you to get a real picture of every project. If you wrongly allocate your costs, or if you do it on a very high level, e.g. on a project level only, you can miss the details and this can lead to the wrong decisions. It’s like setting a “wrong diagnosis”. Besides that, you also have an expenses approval process in place which is usually mandatory routine paperwork, e.g. your project managers need to collect paper invoices and bring them for signing to a manager which controls & approves project expenses. “Bauwise” users can easily & precisely allocate costs on a different project level and use two levels of approval workflow - allocate expenses and get managers approvals online, without any papers.

6. Monitor all your projects “health” - track daily your projects portfolio

Ability to monitor the “health” of all your projects portfolio daily & in real-time is essential for a construction business. Outdated data doesn’t give a value, even worse, you can miss valuable time to make the right decisions. Real control comes from real up to date data and the ability to see the whole picture. “Bauwise” users can use management oriented single page Portfolio report, which enables them to see all projects in one place along with their key indicators such as profit, costs forecast, completion percentage and others. It’s easy to explore every financial detail related to the projects, even drill down to every single invoice. This single page report gives a user a full overview of the real-time “health” of all projects portfolio.

“Bauwise” is a proven “cure” for construction companies “pains”. We would be glad to share our industry know-how and to discuss how does our construction cost management software can help you better control your project financials and keep your projects “healthy”.

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I love how you mentioned controlling the budget to make sure that you avoid over budgeting. If I were to hire a construction management company, I would want them to make sure I stay under budget and maintain success. I will keep these tips when looking for a professional.