Worker in vest holding tablet
Trimble’s Tom Stemm explains interoperability & its impact on efficiency
by Tom Stemm

Construction accounting is more than just tracking numbers and compiling reports. For contractors operating with increasingly thin margins, accounting is essential for building a profitable construction business. At the same time, construction accounting isn’t easy, even for the most experienced accountants.

Construction projects are always tailored to the work they cover. Most contracts have unique terms that require accounting teams to create customized records for each project. Fluctuating costs also make accounting difficult. The price of building materials and labor can fluctuate from month to month or even week to week, rendering estimates produced at the beginning of a project inaccurate. The most significant factor impacting construction accounting is the mobile nature of the business. Most work takes place on the jobsite, but accounting teams in the office need real-time data from the field to keep projects moving forward and help steer the company in the right direction. 

Although many contractors have adopted technology to solve this problem, they’re often left with data spread across many disconnected software systems. This causes information to continue to be siloed, preventing an accurate picture of where a project or the business stands, requiring accounting teams to spend hours reconciling data, tracking down information and correcting mistakes. 

Accurate accounting based on real-time financial data is crucial for making a profit, and its absence shines a light on the industry’s critical need for interoperability. When software systems prioritize interoperability, data can automatically flow without the need for low-value, manual effort from the end user. Automation makes data consistent so all stakeholders can work off the same information in real-time, regardless of how (or where) it’s entered. 


Low Touch, High Reward 

Like many contractors, Hensel Phelps wanted to break down the barriers between software systems so its data would be automatically connected and available across the company. At the time, the company’s primary enterprise resource planning (ERP) software, Viewpoint Vista, was on-premise, and its project management system, ProjectSight, was in the cloud. This required teams in the office and the field to enter details twice, once in Vista and once in ProjectSight, which was time-consuming and error prone. 

“An analogy that I’ve held on to for a very long time is that superintendents and foremen are always trying to minimize the number of times that a craft has to pick up a tool or material and move it to the spot where it needs to be installed,” said Jeremy Sibert, project manager at Hensel Phelps. “The more times you touch that tool or material, the less productive you are. You can view data in the same way. The more times our project and administrative staff have to touch a piece of data, the more productivity that’s lost.”

Hensel Phelps wanted to minimize the number of times people interacted with the same piece of data. The company’s IT department began integrating data between both systems themselves, starting with data for the original budget, contract invoicing, owner payment applications and change orders. That data represented key financial transactions that both project and office staff had to input and manage to keep projects on track.

In its ERP, information related to job costs and money paid or received was always accurate. Still, as subcontractor change orders came in, the company’s project management system didn’t always adjust the budgets. “It became important for us to integrate those areas to ensure the accuracy of our data and to help enhance employee efficiency and employee satisfaction.”

While Hensel Phelps first integrated its own data, many software vendors now provide data integrations as a service because they understand the value it provides to their customers. This includes Vista to ProjectSight and Spectrum to ProjectSight integrations, allowing contractors to easily connect their ERPs to their project management systems, which is one of the most common requests.


Interoperability Is Essential 

Since the internal integration, project staff rarely access Vista, and back-office staff rarely use ProjectSight, saving time and the headache of trying to operate two systems simultaneously. “It’s not about us trying to limit their access, but if they don’t need to use another tool to see the same data, that’s time and money saved for both groups,” said Sibert. 

As Hensel Phelps illustrates, keeping track of all the variables associated with construction accounting is nearly impossible with disconnected systems and siloed data. Interoperability eliminates the guesswork, giving all teams across the business accurate, real-time visibility into the state of every project. This level of openness is imperative to the construction industry’s future. By removing barriers to sharing information, companies can work efficiently and profitably while maintaining data integrity.