Construction Business Owner, September 2007 

It's a common problem shared among busy construction owners—working hard to manage all the details of their jobs leaves little time to tell which projects are working.

Duke, for example, is your typical (yet fictional) contractor. When he first started his excavation company, Duke kept the details of every job in his head.  He knew exactly how much dirt he could move and how many men it would take. Gradually, however, Duke's jobs began to increase. And now he finds it increasingly difficult to handle all the details that he once managed. The problem is...it's all in his head. 

Just as it's important to understand and use management-level summary reports (see Better Next Year No. 3 in last month's issues and the web at www.constructionbusinessowner.com), construction owners also need to be aware of project-level details that contribute to their company's overall success... or failure.   Where management-level reports generally provide one-line-per-job summaries for a bird's eye view of operations, project-level management reports provide owners and managers with greater decision-making details.  

Specifically, these reports provide a narrower focus to help owners and managers:

1) Identify where the job stands today

2) Predict where the job is headed

3) Create a database of history 

And though they vary greatly from business to business, project-level management reports generally help all contractors with job evaluation and future bidding.  In addition, these reports help project managers stay on track and stay accountable throughout the life of a project.

So, where exactly do these project-level management reports come from? Ideally, contractors start with good job costing processes that break down their costs by tasks, activities, phases or whatever makes the most sense for their business. Next, they use accurate methods for collecting job data. And finally, they rely on strong job cost accounting systems capable of managing the data and automating these essential reports. 

Which Reports Should Contractors Use?

The type of work a contractor does and the length of their projects both affect the type of project-level management reporting needed. Excavating contractors, for example, will probably want to run significantly different project-level reports than electrical or mechanical contractors. In addition, because of unique business practices and owner preferences, no two contractors-regardless of trade-are likely to run the same project-level reports.

Unfortunately, it is often at the project level that construction firms realize their general business accounting system cannot produce the kind of reporting needed to analyze jobs.  Why? Because these systems were not designed to work the way contractors work. They have no way of transforming job data into essential reports that answer the how, why, where and when details of every job.

Without the ability to see job details, many contractors dump their job data into spreadsheets and attempt to create their own project-level management reports.  Soon, however, way more time is spent managing and updating their disconnected spreadsheets than analyzing the data, which is often outdated.

 

Title
Comment
Name
Email
Write the displayed characters
	Add Comment