Building information modeling (BIM) has been around for about 40 years now. Yes! You read that right – 40 years. Though in the 1970s when the concept was developed, BIM (as we know it today) wasn’t really implemented until the late 1980s. So I guess we can say, it has been a little slow taking hold. However, as time has zipped on and technology has improved, BIM implementation has rapidly increased.

Building information modeling started as a production of 3D design models to help catch architectural system variances and clashes. Since then, it has become an effective tool in project management and ever more prominent in job cost estimating.

Traditionally, estimators begin their process by doing manual take-offs or digitizing architectural construction drawings. Or possibly, they may be importing CAD plans into an estimating software package. The thing about these processes is that they all have higher risk of error by way of unknowingly incurring an omission or duplication. This has the potential to logarithmically propagate cost errors throughout the estimating process.

Using a BIM solution can significantly reduce (though not completely deny) human error. As the project experiences changes, as they always do, the model can be updated. If properly configured, the BIM should update the takeoffs, schedule, and costing data for the project as the changes occur.

After the BIM is established, pricing information is the next critical set of data which needs to be considered. Estimators can extract the quantities provided by the building information modeling solution and output the information via linking it to a product such as Sage 300 CRE. From here, an estimator may generate estimates based on historical data.

Some of the most critical tasks in estimating are having accurate and current takeoff information, and applying that to accurate pricing and scheduling data. BIM solutions can help to make the quantification tasks easier and more accurate. The integration of this data into an estimating solution can mean that estimators are more accurate and can spend their time and knowledge doing higher value activities.

Every construction company owner and CEO knows that controlling costs and managing their people are keys to profitability. Ready access to financial and operational information are the foundation of effective control. Here’s a way to evaluate whether you are getting the information you need, from our friends at Sage CRE:

7 Questions to Test Your Construction Business Visibility

12/11/2012 at 12:31 pm by Deb Carpenter Beck, Sage Construction and Real Estate

You may feel you already have a clear view of your business from a financial and operations perspective.  Or you may be struggling with getting a handle on just the basics, like understanding your job costs and preparing financial statements.  To help you assess your firm’s business visibility – a key component to effective decision-making – I encourage you to take this short quiz.  It’s fun, informative, and you’ll learn your percent of business visibility based on answers to these seven key questions and more:

1. What do you do when a critical decision needs to be made during a highly condensed timeframe?
2. How many KPIs are you tracking and monitoring on a regular basis?
3. How do you determine what type of work is most profitable for you?
4. How do you collect benchmarking data to compare your performance against similar construction companies?
5. What do you do to predict the final profitability of a project or future impact of a decision?
6. How do you access information from the job site?
7. Do you conduct an annual business visibility audit?

Take the business visibility quiz!

For more information on how to control costs and increase profits at your construction company contact Ledgerwood Associates.

Overlooked or delayed payables entries can mean incomplete or inaccurate job cost and general ledger information. The Recurring Invoices option in AP is a great way to manage these types of payables saving you time and money. 

Most companies have at least some payments that are made to the same vendor for the same amount on some kind of scheduled basis.  These are your monthly rent, loan and lease payments, quarterly and annual contract fees, and similar kinds of payables.  You may not even receive an invoice for some of them and instead rely on lists and reminders to make sure they are paid. 

Use Recurring Invoices to enter the payables once with the details, distributions and recurrence patterns, and then easily generate invoices for these payables.  Add them to your open payables database according to their payment schedules and improve timeliness in posting distribution information to job cost and general ledger.

With Recurring Invoices you can:

• Create recurring payables for amortized or fixed amounts
• Specify joint payees at the invoice level or at the distribution level
• Assign payables to customized groups to easily report on them
• Set specific weekly, monthly and annual recurrence frequencies
• Create on-demand payables that don’t fit a fixed schedule
• Set limits on the number of invoices, total dollars, or date range
• Easily edit recurring invoices if amounts or other variables change.

Not sure how? 

In AP, select Recurring Invoices from the Setup menu.

On the Setup Recurring Invoices screen, click the Help button.
Detailed information on setting up recurring invoices is available for you to view or print. 

Submitted by Ledgerwood Associates Consultant, Kyle Zeigler.

Adapted from an article published at www.constuctech.com  March 28, 2012

Mobile technology is a game changer for the construction industry, which relies on communication and collaboration among many invested parties within the lifecycle of a build. As the industry continues to adopt technology solutions, going mobile is a natural extension for many construction professionals looking to take their investment to the next level.

For that reason, a number of construction-technology providers are expanding their product portfolios to include mobile capabilities.

One solution for AEC (architectural, engineering, and construction) firms offers a complete system for capturing and managing project information from the field to the back office. By keeping project team members accountable for cost, scope, and schedule, the solution helps adopters deliver
projects successfully.

Construction professionals can access construction field-management functionalities from mobile devices such as the iPad and those that run the Microsoft Windows mobile platform. The app allows field staffs to view and manage project information such as punch lists, inspections, and daily
construction reports in real-time. Data collected in the field is automatically synced with data back in the office.

Another company also offers a mobile component to its software solution as part of the company’s enhancement to its cloud-based construction program-management software. The app extends the functionalities of its enterprise software into the field, therefore increasing project teams’ productivity and improving project delivery quality. The solution gives access to project data in real-time, giving project managers more freedom to act on issues immediately. All actions are synced for project members to see and the app can be used on Apple devices such as the iPad, iPhone, and iPod touch.

As smartphones, tablets, and other mobile devices become more ubiquitous in today’s society, these devices are following professionals to work. On the construction jobsite, mobile components of
construction project-management solutions offer the ability to improve communication and collaboration among team members, while reducing costs and contributing to faster project delivery.

How are you using mobile technology in your business?

Ledgerwood Associates Consultants can help you sort out the technology options and help you improve all of your business processes.

“Bottom line – Ledgerwood Associates and Sage Timberline Office gave us power we didn’t have before and put us on a par with larger companies.” David Waltham, President, Coyote Development

Strategic alliances and technology improvements can help smaller construction companies compete more effectively. Read how this company used collaboration and new software to get more work.

Marketing Strategy Requires Collaboration

Coyote Development’s marketing strategy was to develop a strong relationship with larger companies who would recommend them on their big projects. This strategy required that they share information and reports with their larger partners. Their QuickBooks software was not up to the task. Coyote wanted a more reliable and construction oriented system with job cost reporting that would let them get the numbers quickly to the lead contractor’s office.

Sage Timberline Office

In September, 2010 Coyote Development worked with Ledgerwood Associates to install Sage Timberline
Office including job cost accounting, estimating and the core accounting modules. Ledgerwood Associates was involved with every aspect of the set up and conversion, including Coyote’s jobs listing (100 jobs), account structure, and beginning balances. The owner and lead estimator were trained on using cost
databases and how to transfer their estimates into job costing.

New Capabilities Win New Business

Coyote has landed several big projects since Ledgerwood Associates got them going on Timberline Office and Estimating. It’s much easier for them to demonstrate their capabilities to larger companies.

David Waltham, President of Coyote Development summarized the effect on their business, “Bottom line – Ledgerwood Associates and Sage Timberline Office gave us power we didn’t have before and put us on a par with larger companies.”

Company Profile

Coyote Development*, a project oriented Arizona general contractor, builds a variety of government and
commercial projects in Arizona, Nevada and the Southwest. Focusing on technology improvement and streamlining the bid process has helped Coyote put together a string of successful projects resulting in consistent growth in a difficult economy.

*The company name has been changed here for competitive reasons.

What other ways of collaborating have brought you more business?

Mobile devices are on everybody’s minds these days. Here’s an interesting case study about how one construction company is profiting from the technology.

“Thanks to mobile data collection devices and services provided by True Wireless, we know where our workers are and what they are doing at all times, enabling us to pay and invoice more accurately, route and dispatch more efficiently, and to more successfully control costs. Simply put, True Wireless gives us a tremendous competitive advantage.” Paula Wiens, Controller at R&J Construction

R&J Construction realizes significant cost savings while improving productivity and customer service by deploying integrated mobile data collection and payroll technologies from True Wireless.

Situation
R&J Construction is an award-winning custom building company, well known for providing superior service and high-quality craftsmanship at a competitive price. Key to maintaining this reputation is R&J’s ability to automate critical business processes, such as mobile worker management and payroll administration.

Challenge
Improve the time-intensive and inexact process of recording worker timesheet, project status and vehicle mileage information. Also, gain the ability to respond to emergency situations by knowing the whereabouts of field workers at all times.

Solution
R&J deployed a GPS mobile workforce management solution from True Wireless, along with the ezLaborManager payroll solution from ADP. GPS time and tracking information is transmitted wirelessly and automatically to the ADP ezLaborManager system.

As a result, R&J knows in real-time precisely how many hours each worker is on a job and what projects he is performing. Workers choose a customer job number, then select the type of work they are doing such as framing a wall or interior trim work and can also enter job details. Both the GPS and ezLabor-Manager are web-based hosted solutions providing anywhere anytime access and minimizing maintenance costs. The GPS application and ezLaborManager work together “out-of-the-box,” so deploying the solutions was fast and easy for R&J.

Benefits

Billable Time Increased by 12 Hours per Week
Elimination of paper-based timesheet and project status recording along with improved accuracy and worker accountability creates an impressive 12 hours of additional billable time each week per worker.

Mileage Reimbursement Costs Cut $6,000 per Month
Improved vehicle mileage tracking, job-costing and worker performance reporting has reduced R&J’s vehicle mileage reimbursement costs by $6,000 per month.

More Precise Job Estimates
More accurate Job-costing allows for more precise job estimates.

Improved Customer Service
Enhanced mobile worker location tracking has improved customer service.

What has been your experience with mobile data collection devices?

For more information on construction technology visit www.ledgerwoodassociatesusa.com

“I’ve got good news and bad news,” your estimator says. “The bad news is we got the bid.”  “Then, what’s the good news?” you say. “We’ll only lose $10,000 on it,” says the estimator.

Underestimating a project or losing bids by overestimating can seriously erode profits. Too often these problems are caused by errors in spreadsheets. A 2004 PricewaterhouseCoopers study shows that up to 91 percent of sophisticated spreadsheets contain errors. A 2007 study concludes the error rate is 94%.

That sounds about right considering how often I find errors in my own spreadsheets. We’d all like to be error free. Knowing the sources of spreadsheet errors may be helpful in eliminating them.

Ten common errors or problems with estimating spreadsheets:

1. Hardcoding your values in the spreadsheet formulas resulting in right this month and wrong forever
2. Adding rows or columns that don’t get included in the range of the sum, subtotal and average functions
3. Losing unsaved changes due to interruptions
4. Data entry errors such as skipped entries or transposed numbers
5. Saving “what if” changes over the Excel worksheet you want to keep
6. Formula errors like parentheses errors in a mathematical formula; formulas pasted over with constants; or formulas no longer calculating properly when you delete an item
7. A bad query copied into a spreadsheet
8. A bad sort that destroys the integrity of a row
9. Old spreadsheet errors copied over and over again
10. Maintaining a number of templates for specific types of projects, which multiplies the risks of data entry errors, omissions, transposed numbers, and outdated pricing

One way to reduce the number of spreadsheet errors is to limit access to files or locking certain cells. You may also want to implement quality-control procedures for catching data entry errors in spreadsheets, including input controls, validation, and cross-footing.

An example of an input control is reconciling the data entered into the spreadsheet to the source records. A common sense suggestion is to separate the data entry and formula areas on a spreadsheet.

Finally, it’s a good idea to have the logic of the formulas within the spreadsheet inspected by someone other than the user or developer of the spreadsheet.

What do you do in your company to prevent spreadsheet errors?

Call Ledgerwood Associates today for a free consultation on how to improve your estimating speed and accuracy. 877-918-8301

Does this sound like you?

“We are having a hard time winning bids that result in profitable jobs.  We can win short-term business by low-balling it, but we cannot survive this way.”

Here’s a great discussion of the issue from Sage CRE.

Impact
ERRORS, LOSS OF PROFIT:  The cost data that our estimators use is inconsistent and sometimes out of date.  Too high and we miss the opportunity.  Too low and we leave money on the table and run the risk of being awarded the job with no chance for profitability.

INCONSISTENCY:  Our estimators take great pride in their work and like to do things their own way.  Unfortunately, when everyone is using different tools and methods for estimating, it makes final review and the ability to reuse historical estimates for new projects we’re bidding difficult-not to mention risky.

REPUTATION:  Relationship building is key in the construction industry.  If we continually low ball bids to get work in the door and rely on expensive change orders to make jobs profitable, we run the risk of tarnishing our reputation and jeopardize future opportunities.  We recognize the shortcomings of doing estimating using a generic spreadsheet.  We’re required to double check all our work and run the risk of making errors that would give us a bad reputation. Adopting a construction-specific estimating tool will streamline/automate the entire estimating process and also help build historical information that can be used again and again in future estimates.

Capabilities
Estimating databases come in a variety of flavors depending upon the user’s specific needs and trade.  Select from a shell to build your own or choose from a number of “out-of-the-box,” databases requiring a minimal amount of refinement.

Solution
Integration of Sage Timberline Estimating with Sage Accounting (Specifically Job Cost) Timberline Office, Master Builder or Timberline Enterprise helps eliminate the need for duplicate data entry and helps track job profitability at all stages of the project. By having all of your estimators using the same tool and collectively building a database of costs and information that you can access for future estimates, your estimates will be accurate and ensure the projects you bid on will be profitable.

Hope this was helpful. I’ll have more on estimating next week.

Do you agree that low-balling bids will tarnish a contractor’s reputation and jeopardize future opportunities?

Service and specialty contractors have complex and highly specialized business needs. Examples of these types of contractors include: electrical, HVAC, plumbing, roofing, siding and sheet metal, landscaping, painting, carpentry, concrete, excavation, drywall, masonry and flooring.

In contrast to general contractors, who typically focus on longer term, large-scale jobs, service and specialty-oriented companies have many more specialized jobs to bid, manage, and execute. They have to juggle customer requests, coordinate service schedules, track parts, and manage a fleet of trucks; all of which must be done as effectively and efficiently as possible to ensure quality service while maintaining maximum profitability.

In a tough economy, service and specialty contractors are intently focused on reducing costs by maximizing their team’s efficiency. They want to take advantage of the newest technologies so they can streamline their operations and optimize customer service. The leaner their business processes, the more productive their teams can be. So, they’re looking to simplify operations by employing tools that enforce accountability while tracking business performance.

Service and specialty contractors looking to identify potential cost reductions and productivity improvements should first examine their information systems and related business processes. Many contractors experience difficulty with one or more of the following in their systems and processes:

Lack of Integration – Using multiple applications or manual processes
Error prone multiple data entry points
Tedious Workflow due to high volume and complexity of jobs and agreements
Difficulty managing complex inventory (e.g. parts, multiple locations)
Purchasing of equipment, parts coordinated with inventory, accounting and service
Poor equipment tracking and management
Communication breakdowns between staff, dispatch and back office teams
Dispatching the right technician with the right skills for the right amount of time
Payroll complexity
Difficulty making billing adjustments, and billing schedule

How new technology can solve these problems

Software is currently available that provides integration across purchasing, inventory, service management, accounting and other functional disciplines. Benefits include improved access to data, improved workflow and accuracy, and better inter-team communication. Here’s what you should look for in a top notch software package for service and specialty contractors:

• Complicated importing and exporting of data and bouncing back and forth from one software application to another are eliminated.
• Applications improve customer service by allowing dispatch to respond to incoming service calls, manage field technicians and process work orders and bills from a single work space.
• Modern, easy-to-use interfaces are intuitive and flexible. Layouts can be customized. Navigation is accomplished using process maps and Outlook-style menus.
• Work spaces provide interactive inquiries so users can easily work with their data. An example might be to examine a client site, edit trip data, and drill down to associated purchase orders or invoices within that work space.
• Information is stored in a centralized database providing the flexibility for remote access and add-on application integration. Automated and web-deployed updates help IT departments save time and cut costs.
• Process maps provide a visual representation of everyday role or department processes that simplify training.
• Critical financial and cost information is easy to access so users can quickly make important decisions and manage the bottom line.

iPad and Mobile Technology

Mobile technology is improving communication between service technicians, office and dispatcher with on-line real-time access to schedule changes and GPS location data. As a result, technicians always know where to go and what to do. Techs are also capturing more business opportunities in the field.

How to find the right technology and Solution Provider

You want a company with deep industry and business process expertise and a proven track record; one that can focus on creating a long-term relationship to create knowledge and usability of their systems. They can assign the right people, skills and technologies to help you improve your performance. 

Before you decide on a solution provider look for the following:

Superior Implementation Methods

Refined methods for implementation, training and support services must include conducting a needs analysis to determine the solution and critical path schedule for a successful implementation while communicating progress at every step.  Pre-built standard implementation methods reduce the time and resources needed for a successful software migration. You want a company with proven experience in specialty and service business operations, one that can provide:

• Software implementation, training and support services focused on the construction industry.
• Specialized material and resource database development for estimating and procurement.
• Hardware and network integration.
• Outsourcing with third parties or applications that specialize in your trade for creating maximum value to core competencies.

Best Practices

Experienced professionals deliver innovative solutions to assist in transforming your organization’s finance function, using best practice in finance management to achieve improved business performance.

Human Performance

The ideal company will help you define roles for each employee within the office workflow for increasing productivity and eliminating unnecessary costs.

Trust and Value

The lowest price is not always the best value. Look for a company you can trust to be there over the long haul; a company providing services that add value to your solution:

• Personalized Service – A company that wants to know you and your capabilities and resources for getting your business where you want it to go.
• Real-Time Answers – If your system needs attention yesterday, the ability to log into your systems and give you a helping hand.
• Reports You Need and Use – Consultants skilled at creating customized reports. 
• Local and Regional Training and Seminars – Face-to-face and online skills improvement.
• Communication –Publishes an email newsletter or blog with technical tips and schedules of upcoming classes and software enhancements.
• Users Groups – Has local and/or national users group to learn from other users and create informal learning chains.
• Hardware and Network Support –Works with local and national Information Technology companies to share resources and knowledge of customer’s technology environments and recommend reputable companies.

Backed by Software Industry Leaders –Represents only the best in class software for the service and specialty contractors industry. 

The ideal solution provider will work closely with you to develop the scope and standards of the services you require.  They will incorporate substantial capability improvements and cost reductions into an innovative solution that meets your needs.  They will apply pioneering process improvements and standardized leading-edge technologies to create and sustain business value.

What can you expect for your service and specialty contracting business?  Finding the right technology and the right solution provider  will likely result in streamlined financial operations coupled with substantial and sustained operating cost savings; transformational business outcomes with less risk, less capital and faster timelines.

Here are some of the highlights how construction management software has improved.  Now you can move jobs in the project management module… Pretty cool, job cost is no longer over-worked having to do all the heavy lifting.   

You can upgrade your database and estimates on the fly; that means you don’t have to set aside time to wait for the entire construction management software to adjust to the newest version all at once.

Oh yea, estimating supports multi-currency.  Now what construction management software can say that?

In payroll, you can delete checks and address book can integrate with Sage CRM software.  CRM is the acronym for customer relationship management.  This is good news for roofing and asphalt companies, since sales and contact databases are a big part of their office procedures.  Good construction management software is one that can handle most of your office tasks in one place.