PROJECT MANAGEMENT SOFTWARE CAN SAVE TIME AND MONEY WHILE PRODUCING BETTER RESULTS BY MARTY MCCARTHY, CPA, CCIFP | MCCARTHY & COMPANY, PC
Large contractors must be highly organized to run multiple projects simultaneously, working with numerous crews on various job sites at different stages of construction. In doing so, they often use project management software to streamline operations. Managing all aspects of construction, from land acquisition to financing, permitting, building, marketing, and eventually renting or selling units, is an enormous task. Contractors who automate the process achieve greater efficiencies, improved margins, and higher profits. Small to mid-size construction companies often use Excel or paper files to manage the details of every job. Investing in project management software would help manage tasks and outcomes. Project management software is a collaborative tool that provides everyone on the job with the information needed to complete tasks according to the contract. Change orders, material availability and delivery schedules, talent management, billing, accounts receivable, job costs, and other critical tasks can all be managed from one system, preferably in real-time. Construction managers can use project management software to organize teams, predict costs, and track projects down to the task level, which is key to controlling and managing costs.
Key Features
Project management systems may come with a variety of modules that offer various solutions. Sean Peek explained the four areas supported by most project management systems in his article, Project Management Software Use Cases: Contractors and Construction (Business News Daily, June 29, 2022): Project scheduling: The scheduling feature allows managers to assign employees, resources, and equipment to a project. This is especially important for companies with back-to-back deadlines or multiple contractors to manage.
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Project tracking: Construction management software allows businesses to keep track of task lists, time, and progress throughout a project’s life cycle. Many programs have automated features to streamline communication, such as automatic notifications when tasks are assigned, updated, or completed. They can also send out alerts if projects are approaching budget or timeline constraints. Document management: All project documentation – including blueprints, contracts, and photos – are archived in a centralized, easily accessible repository. This helps teams stay organized and makes collaboration significantly easier. Document management provides a virtual paper trail. Job costing and project finances: Project management software allows team members to compare initial estimates with actual project costs, as well as to create and send purchase and exchange orders. Many programs also integrate with accounting software, allowing contractors to manage payments, invoices, and timesheets in one place. Peek also importantly notes since most construction management software is online, team members can easily access and collaborate on projects in real-time from any location.
Benefits
Researchers found that being able to accurately estimate a project timeline is the number one benefit of using a project management tool. (Capterra. Project Management Software Market Research Report. Olivia Montgomery, May 25, 2021). Considering how margins are shrinking due to escalating labor and material costs, inflation, and the cost of borrowing money, it is important to manage expenses, inventory, and other job costs. This is especially true when renting a building. The time, money, and resources that go into customer relationship management, work orders, and rent collection can be substantial.