Sage Job Ready Guide

Job Ready Guide

Staff smarter

Top ten time wasters for construction companies

2 Top ten time wasters

Table of contents Is inefficiency your norm? .......................................................................................... 3

#1 Estimators do takeoff from manual plans ............................................................ 4

#2 No one knows if the job will make a profit ........................................................... 5

#3 Reporting time from the field is a challenge ...................................................................................................................... 6

#4 Subcontractor insurance certificates and lien waivers are processed by hand .......................................................................... 7

#5 Accounting staff fills out AIA forms manually ....................................................................................................................... 8

#6 Payroll administrator struggles with government reporting ................................................................................................. 9

#7 Payroll administrator works overtime to manage union payroll................................................................................................ 10

#8 Accounts payable clerk spend too much time tracking down invoice approvals ..................................................................... 11

#9 Accounts receivable clerk hand enters customers payments ................................................................................................. 12

#10 Service team deals with manual work orders ......................................................................................................................... 13

About Sage ................................................................................................................. 14

About the Job Ready Guides .................................................................................... 14

This document contains general information only. Sage Software, Inc. is are not, by means of this document, rendering surety bond, accounting, business, financial, legal, tax, or other professional advice or services. Before making any decision or taking any action that may affect your business, always consult a qualified professional advisor. This document is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Sage Software, Inc., its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this document.


Is inefficiency your norm?

If you are like most construction companies today, you are seeing a lot more work

coming in your door. That’s the good news! But that additional business could be putting

extra strain on your current staff. Your first reaction may be to hire more people to help—

both in the office and the field. Finding qualified staff, however, isn’t easy these days. In

fact, according to the Associated General Contractors (AGC), 25% of contractors have

had to turn down work because of today’s labor shortage.

Time to take a different approach

Another way to tackle the situation is to work with current staff to not only improve their

skills but remove tedious manual processes that could be affecting their productivity. It’s

often surprising to see how much time employees spend on inefficient processes and

activities—some which can be automated. These inefficiencies often are not readily

apparent because employees have become accustomed to challenging processes and

the tedium, waste, and rework has become the “normal” way of doing business.

This guide will help you identify the top ten time wasters often present in construction

firms and show you how the latest software technology can eliminate them. By using

information from this guide to evaluate and make changes in your business, you can:

Streamline processes that are currently bogging down your staff.

Allow your team to redirect their time to activities that have a greater positive

impact on your company results.

Increase staff morale by giving them more fulfilling work.

Obviously there will always be a need for you to hire new employees. The key is to

reserve that hiring for individuals who can fill true skill gaps, not plug in process holes.

Hire people to do the thinking.

Use systems to handle the

rest.—Mary Davolt, Chief

Financial Officer for

Englewood Construction


#1

Estimators do takeoff from manual plans

Today electronic plans are commonplace. So is software that allows estimators to

electronically take off quantities and dimension directly from those plans. There is no

longer a need to print the plans to do the takeoff with a digitizer or manually with scales,

rulers, and spreadsheets.

Contractors who use electronic take off tools combined with construction estimating

software have cut their estimating time in half, giving them more time to refine their

estimates and develop a more competitive bid strategy.

Not only is electronic takeoff much faster than traditional methods, it’s more accurate

(getting down to measurements within thousandths of an inch). By using electronic

takeoff tools to highlight what they’ve already taken off, estimators also avoid potential

mistakes and unforeseen project costs due to omissions.

Linking takeoff and estimating

Additional time can be shaved off by integrating electronic take off tools with construction

estimating software. The time drain in building an estimate from scratch—one item at a

time—is significant. Even if you maintain a number of spreadsheet templates, keeping

them up-to-date with pricing and estimate details can be cumbersome.

Many contractors find it much more efficient to populate their estimates using a database

that stores all items, pricing, productivity factors, formulas, and other estimating details.

Databases that also store groups of items are an extra boost to productivity by allowing

estimators to take off all the items of a wall, concrete slab, or other building component in

one step.

“We can produce estimates in

four or five hours now, when

before they would have taken

us four or five days.” – Chris

Rowe, president, Echo Pacific

Construction


#2

No one knows if the job will make a profit

Nothing is a bigger time waster than focusing employees on a project that ends up barely

covering costs, or worst yet, puts you in the red.

Ask yourself these key questions about your current jobs:

Are you able to view at a glance which projects you are making and losing

money on based on current billings and costs?

Do you know how changes on a project are impacting your overall profitability?

Can you tell exactly which parts of the project you are under or over budget?

Do you know all your committed costs by job?

When you close out a job are you confident you won’t receive a late invoice that

you had forgotten about?

If you answered “no” to any of these questions, you don’t have the daily visibility you

need to control project costs and ensure your team will reach profit goals.

Tracking job cost efficiently

Your construction business has unique needs when it comes to managing job costs. Most

accounting software is not set up to track costs by project, requiring many contractors to

handle it separately using spreadsheets. This process is doable when you have only a

few projects to keep track of. But as more business comes in your door the process of

tracking job costs can become a huge time drain on employees doing the work.

Construction specific accounting systems can track job costs as part of your normal

accounting and project management processes to give you the insight you need. On a

daily basis, you can see at a detailed level where a job is at cost-wise and whether you

are on track to meet profit goals. And if you see an overrun you can take action to

proactively prevent profit erosion before it’s too late.

Process tips

Brian Garcea, CFO at RG Construction has set up an automatic alert that notifies his

team of jobs that haven’t been billed, or when the current profit is less than a certain

percent.

Determine the type of jobs that are most profitable and focus on going after them to

make the best use of your employee’s time and effort.

“The biggest thing that helped

our bottom line was knowing

what a job really costs—how

much labor was involved and

how much material. That was

mystical in the past.”—Steve

Getzin, Vice President, J.F.

Cook Company


#3

Reporting accurate hours from the field is a challenge

When your field team is reporting hours worked using paper timecards, email, or by

phone it often takes too much time to do it on a daily basis. To deal with a cumbersome

manual time reporting process, field managers opt to submit labor hours weekly. But by

then it can be difficult to piece together what happed during the week, causing potential

inaccuracies.

Even if your company’s superintendents are good at submitting manual timecards on

most days, there are often other process challenges. Handoffs of the timecards to project

managers for review and approval, for example, may result in extra time spent tracking

down missing or incorrect information. Plus payroll administrators still have to reenter the

information once they receive it in order to process payroll.

Mobile technology can help

Today, mobile devices along with cloud-based time capture apps are making it much

more convenient to capture, approve, and submit labor hours from the field on a daily

basis. And if the time capture application is integrated with your company’s payroll

software, your accounting staff do not have to reenter the information.


#4

Subcontractor insurance certificates and lien waivers are processed by hand

The rules and regulations are becoming stricter and the financial impact greater if you

don’t pay enough attention to compliance issues such as assuring your subcontractors

are fully insured and have provided signed lien waivers.

Compliance paperwork, however, can be an administration nightmare if done by hand. In

addition to insurance certificates and lien waiver, there are other key documents that

need to be tracked, including weekly certified reports, permits, licenses, W-9s, drug test

results, notice to owners, close-out documents, and punch lists.

The result is many companies can’t keep up with all the details, putting their businesses

at risk. One Georgia contractor found out the hard way when an uninsured worker was

injured on one of its jobs. The incident drove up the general contractor’s premiums for the

next five years, costing the company hundreds of thousands of dollars and impacting the

GC’s bidding competitiveness due to higher costs.

Streamlining compliance

Construction software technology can address subcontractor and vendor compliance

concerns, shaving off hours of work for employees. Before automating their subcontractor

compliance management, Pinnacle Construction Support Group had two to three people

handling their risk management. Now only one person is needed to do the job.

To reduce work in this area for your company, look to improve processes and implement

software that will allow you to:

Easily set up the compliance items you want to track at the beginning of each job.

Electronically store, track, and manage compliance documents for quick reference—

including the ability to collect and scan documents in the field.

Give project managers mobile access to view compliance information so they know

who is cleared to work on the job site.

Automatically block invoice payment if a subcontractor or vendor is in non-compliance.

Automate emails to subcontractors, notifying them, for example, that their insurance is

about to expire.

Creates reports to let your owners and other clients know that you are staying in

compliance and the job is moving smoothly.

Notifies you when insurance, a license, or other compliance items are about to expire.

“It (automated compliance

tracking) has made a huge

difference by saving us 20 to

30 hours of work a month.”—

Andrea Mosher, Risk

Manager, Pinnacle

Construction Support Group

View video

https://youtu.be/VlTE8LvP0WI

https://youtu.be/VlTE8LvP0WI


#5

Accounting staff fills out AIA forms manually

Your accounting team has to keep track of a lot of numbers to properly complete an AIA

billing form. For each billing period they have to fill out the original contract amount, what

has been previously billed, work completed during the current billing period, change

orders that need to be taken into account, and retainage—just as a starting point. To

create even more work the information has to be broken down by cost code or phase of

work.

Doing all if this work manually takes a considerable amount of time. That was the case

for Ecker Enterprises when they used to keep track of AIA billing information using

Microsoft Excel. Now the drywall and framing contractor uses software that can handle

construction-related billing. When they need to produce an AIA G703 form they can

prepopulate it with most of the required information needed right from within their

software system.


#6

Payroll administrator struggles with government reporting

The U.S. Department of Labor estimates it takes 55 minutes to complete the certified

payroll form WH-347 for eight employees on a single job each week. And that’s one of

the easier government forms to complete!

Payroll reporting in general is a key area where you can increase efficiencies. In addition

to certified payroll reports on any government work you do, there are W-2s, 1099s, and

other payroll tax reports that need to be filed each pay period. The hours to prepare these

reports manually can add up quickly.

Remove the tedious work

Construction payroll is already complex compared to many other businesses. Why make

it more complicated with manual processes. To reduce work in this area, look to improve

processes and implement software and services that will allow you to:

Generate your government forms automatically with much of the information prefilled.

That way all you have to do is review the information and add adjustments as needed.

Electronically file your forms to the government. Services such as Aatrix can be

integrated with your accounting software to file hundreds of government reports and

forms right from the software.

Automatically mail employees copies of their W-2s. Even better, some e-filing services

provide W-2s to employees through a secure website so they can access the

information 24-7.

And, of course, anything you can do to make it easier for payroll staff to get time

information from the field will make their jobs a lot easier. Mobile time entry and approval

(see page 6) is one way contractors are reducing the hassle of getting payrolls

processed and government reports out the door.

“Previously, we were

completing this form (State of

Connecticut certified payroll)

manually. Now it is produced

by the software, and all we do

is sign and submit it.” Mike

Zagorski, President, Dyna

Electric Company, Inc.

“(We’ve) cut our state and

federal reporting and filing

from a full day down to one

hour.”—Nick Andreolas, CFO,

Ecker Enterprises


#7

Payroll administrator works overtime to manage union payroll

If you hire union workers your payroll takes on yet another layer of complexity. Just one

job could have workers from several different unions and locals, each group with its own

reporting forms and requirements. And depending on the type of job, a worker can fall

into different union classes, with different pay rates and fringes.

Can your payroll software or service handle multiple union requirements? If it doesn’t,

your payroll staff is forced to do lots of manual calculations and manipulate data for each

union and local you work with. That’s a lot of work.

Assistance with union requirements

Automating your union payroll process will go a long way to reduce your payroll staff’s

workload. An effective payroll system will allow you to:

Track union contract details so you know exactly what you are required to do.

Define guidelines for the automatic calculation of union pays, deductions such as union

dues, and fringe benefits for any combination of union, class, and local.

Quickly enter time, including automatically switching union locals based on job location.

Run a union summary and other required union reports.

Of course, there will always be times when someone leaves and you need to hire a

replacement. Finding someone with union payroll experience may be preferable but not

always possible. By automating your union payroll processes it will be easier to onboard

a new payroll employee because the guidelines, calculations, and processes are already

built into the software.


#8

Accounts payable clerk spends too much time tracking down invoice approvals

In many construction companies it’s not unusual for a coffee-stained copy of an invoice to

get lost somewhere in the job site trailer or the backseat of a pickup truck. Even if the bill

was sent through email, it could easily get buried among the whirlwind of submittals,

drawings, RFIs, meeting minutes, and other job correspondence project managers deal

with every day. Consequently AP clerks spend a lot of time trying to track down who has

what invoice so they can get it approved and paid on time.

Time efficient invoice approval

Many contractors are taking another approach to streamline the invoice approval

process: They are integrating document management software with their accounting and

project management systems. This allows them to set up customized routing rules to

make the invoice approval process as efficient as possible. As a result, AP clerks can

track invoices electronically while they route from person to person to see exactly who’s

sitting on them. It also makes it easier for project managers who can see each day the list

of invoices they need to approve.

More than just invoices

The construction process is traditionally paper intensive. But it doesn’t have to be. In

addition to invoices, you can also electronically store, retrieve, and route lien waivers, AIA

payment applications, and other construction documents. For added time savings, look

for document management software that will:

Automatically notify reviewers, via email, that a document has been sent to them for

approval or other action.

Let you “digitally staple” related emails, delivery tickets, POs, subcontracts, change

orders, and other documents to invoices.

Create and deploy electronic forms such as daily reports, punch lists, purchase

requisitions, and expense reports.

Easily find documents associated with an invoice, vendor, job, or other criteria.

Maintain a history of any revisions made to documents or action taken such as

approvals.


#9

Accounts receivable clerk hand enters customer payments

You know the importance of cash flow to your business. Finding ways to streamline your

payment process will not only save time for employees but keep your cash flow healthy.

To eliminate time-consuming double data entry and reduce payment cycles, contractors

are using electronic payment systems that automatically enter payments into their

accounts receivable software. These payments can come from:

The job site. Mobile devices have made it much easier for service technicians and

authorized field staff to take debit or credit payments at the project site as soon as they

complete the work or need a deposit. Customers also like the convenience of using their

credit cards on the spot, rather than waiting for an invoice and having to send in a check.

Direct from the clients account. With your customer’s permission, you can store bank

routing numbers and other information for quick payments against invoices.

As an electronic check. Some of your customers may still prefer to send a check.

Those checks can be scanned for direct deposit into your bank and then electronically

accessed for invoice payment.

In any of these scenarios, the added time-saving bonus is your employees no longer will

have to wait in long lines at the bank to make deposits.

Are you PCI compliant?

Another advantage of using a reputable payments service is the security and compliance

benefits it offers. Payment Card Industry (PCI) compliance is a requirement of all

businesses that interact with credit or debit cards. If you aren’t PCI compliant you open

yourself up to legal liability and fines. Using a PCI compliant payments system ensures

you are up-to-date on the latest best practices to protect your business and customers

from payment fraud.

Processing payments directly

through a business

accounting system can save

up to five minutes per

transaction—Sage Integrated

Payments Study


#10

Service team deals with manual work orders

If you are a service oriented business such as an electrical, plumbing, or HVAC

contractor, a manual work order process can mean wasted time both in the office and for

technicians in the field. These inefficiencies can also keep you from providing the level of

service your customers expect.

Today’s mobile and cloud-based software technology is opening up new ways to get

work orders processed more quickly. Here’s how:

Empowered customers. We are a self-service society, from do-it-yourself grocery

checkouts to online banking. So why not give your customers the control to look up their

own account information, schedule a service call, or pay their bills online. Leading cloud-

based service management applications allow you to provide this option to your

customers.

One-step work orders. Armed with mobile devices, technicians can submit work

requests as well as document work order details from the field. The information is logged

automatically into your systems, eliminating the need for service managers, dispatchers,

and other office staff to rekey it.

Additional time savers

Think of how much time could be saved by getting jobs done on the first call.

Unfortunately, too many jobs come to a halt while technicians wait to get needed parts

and tools. To address this, give your technicians the ability to create purchase orders

(within company guidelines) from the field so they can get the parts to complete the job.

And finally, give your technicians mobile access to site history, equipment details, work

orders, and other key information, so they can complete the job more quickly and

effectively. It will also leave a good impression with your customers.


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