Vice President &
Chief Information Officer (CIO)
Austin Lane Technologies Inc.
For chief operating officers and project managers, the performance of field personnel is their central focus. Over the years, certain metrics and processes have gained and lost popularity, but one metric that remains is the percentage of completion rate (PoCR). The PoCR is a method in which revenues and expenses are calculated as a percentage of the work completed during an allotted amount of time. Key factors in the use of this approach are the duration of the project, as well as the way the project is divided into phases, to allow appropriate and useful tracking data to be collected. Projects that have well-defined task tracking mechanisms gather important data to stay within budget and on schedule.
One of the most important aspects of improving the PoCR is digitizing your company’s workforce with a production tracking software. A good software solution should be simple, accurate and allow your field management to make the right decisions at the right time by providing intuitive analytics in real time. Jobsite intelligence is also key to improving the effectiveness of the PoCR method. Technology will prove to be a powerful tool to efficiently keep projects at or under budget.
Joe McLaughlin, CPA, CCIFP
Chief Financial Officer (CFO)
Knowing project costs is critical for a successful business. In order to effectively evaluate a project, the project’s cost-to-date data must be reliable. Therefore, the ability to provide detailed training during the onboarding process for new employees and updated reference documentation for existing employees is essential. Employees who are responsible for issuing purchase orders, coding invoices and projecting costs, must have a strong understanding of the company’s internal policies and procedures. Companies that are proactive with developing detailed training materials and also track and evaluate the competencies of learning along with completion of training, will improve the integrity of the data used when calculating percentage of completion.
Developing a consistent cost-coding structure is another critical factor that can have a large impact on percentage of completion. Finally, a company should take advantage of the latest technology to maximize efficiency and reduce manual processes. Implementing a construction-specific enterprise resource planning (ERP) tool is definitely a competitive advantage that can directly impact percentage of completion calculations. The right ERP will ensure labor, direct and indirect costs are distributed to the correct cost codes as data is processed.
David Luker, CPA
RSM US LLP
It’s all about communication. The speed with which we are able to transfer information between relevant stakeholders is the primary limiting (or promotional) factor when it comes to cash flow. In a perfect world, subcontractors, the contractor and the owner would be able to instantaneously exchange project status, supporting documentation and payment.
While we are not there yet, information technology pioneers continue to develop systems aimed at achieving the goal of real-time project information exchange. The integration of project management applications with accounting and ERP platforms helps to move the needle a step closer, allowing project managers instant access to job-cost data.
One of the biggest challenges facing construction business owners today is the migration of antiquated accounting and project management processes into the digital realm. To be sure, those who push their teams to embrace automation will access capital more quickly and reduce financial exposure, while those who coddle historical practices will continue to deal with slower payment and limited working capital.